The concept of money – how it works, how to manage it, how to spend it – seems like something we all should be knowledgeable about. However, it is not that simple. When you start earning your own money, you realise that there are various credit and lending options available which can cause you to spend money you do not necessarily have – behaviour that will catch up with you sooner than you think.
Regrettably, financial education is often not taught at home or school, and therefore it becomes all the more important to educate oneself on money-related matters from an early age. In light of Youth Day on 16 June, Iemas Financial Services highlights a few important financial principles that the youth in particular needs to be aware of:
What is your Credit Score? Everyone who utilises credit has a credit score which is calculated based on the type of debt, payment and spending habits, total debt balance outstanding and other factors. “Many young people apply for a credit card, not always knowing how it works or how to manage it. This could result in them being in over their heads with credit card bills. A good rule of thumb is to rather acquire a credit card later in life when you are financially better established, or to settle your credit card debt first at the end of every month in order to build and maintain a healthy credit score” advises Johan Nel, CEO of Iemas Financial Services.
Loans and Debts: “Having a vehicle or home loan from an early age is not necessarily a bad thing as it can increase your chances of qualifying for other debt at a better interest rate. It will also enable you to qualify for larger loan amounts in the future. The key is to manage your debt responsibly by paying your instalments on time, every time! A good place to start is by taking out an educational loan if you cannot afford to pay for your tertiary education in cash. This way you invest in your future and stand a better chance of finding a job after you qualify” says Nel.
Culture of Saving: Saving for your retirement when you first start working might seem unnecessary when you consider that you will most likely work until the age of 65. The reality is that individuals who begin saving and investing in their twenties have a far better chance of reaching financial independence by age sixty than individuals who wait longer. “The onus is on us in the financial services industry to educate young people to understand the importance of financial planning and earning compound interest. This is the best way to ensure that individuals will engage in responsible saving to secure their future” says Nel.
As South Africa’s largest financial services co-operative, Iemas Financial Services promotes financial inclusion by offering various financial products according to the individual’s unique financial requirements. In addition, we practice responsible lending and drive financial education through our financial wellness programme at the workplace. “Iemas offers free financial wellness workshops at our participating employer groups. During these sessions we cover important topics such as compiling a budget, managing your debt responsibly and the importance of saving” concludes Nel.
About Iemas Financial Services (Co-operative) Limited
Iemas Financial Services is a co-operative that offers a wide range of affordable and competitive financial products and services to over 161,000 members across South Africa.
At the heart of Iemas’ co-operative business model is the principle that the organisation is owned by, and operated for the benefit of those using its services (referred to as its members), and Iemas members annually share in the profits of the organisation based on the products/services they utilised during the year.
Iemas has business agreements with over 600 employers authorising the co-operative to offer its financial products and services to their employees.
With a history spanning over 80 years, Iemas has extensive experience in providing financial services and its product portfolio includes vehicle financing | comprehensive insurance solutions | educational loans | secured and unsecured personal loans | a purchase card | housing solutions.
Insurance products are offered through Iemas’ wholly owned subsidiary Iemas Insurance Brokers (Pty) Ltd. Iemas Financial Services (Co-operative) Limited is a registered credit provider (NCRCP 1332) and Iemas Insurance Brokers (Pty) Ltd is an authorised financial services provider (FSP 47563).
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