Seen Here: Tshiamo Molanda, Head of Personal Banking South Africa at Standard Bank, says South Africa’s path to financial security should be measured not only by savings, but also by the assets, opportunities and generational wealth that individuals are building for the future. Photo Credit: Supplied
For decades, South Africa’s low savings rate has been viewed as one of the country’s biggest financial shortcomings. Conventional wisdom has long urged consumers to spend less, save more and prepare for the future. Yet despite years of financial literacy campaigns and repeated calls for greater discipline, national savings levels have remained stubbornly low.
Perhaps the conversation has been asking the wrong question.
Rather than focusing solely on why South Africans are not saving enough, it may be more useful to examine what they are doing with their money instead.
According to the 2026 Standard Bank Youth Barometer, produced in partnership with Youth Dynamix and Liberty, savings account for only a small portion of spending among young South Africans. On the surface, this appears concerning. A closer look, however, reveals a generation making calculated financial decisions aimed at building long-term security through different means.
Wealth Creation Looks Different
The traditional model of financial success often begins with building a healthy savings account before making major purchases. For many South Africans, however, that sequence simply does not reflect reality.
Faced with rising living costs, transport expenses, debt obligations and economic uncertainty, many consumers are not choosing between saving and unnecessary spending. They are choosing between saving and essential investments that they believe will improve their financial future.
Young South Africans continue to buy homes, finance vehicles, renovate family properties and invest in education despite significant financial pressure. Rather than signalling reckless spending, these decisions often represent deliberate efforts to establish financial independence and create lasting wealth.
The findings suggest that financial progress should not be measured by savings balances alone.
Building Assets Before Building Savings
The Youth Barometer shows that many young consumers only save once their monthly obligations have been met. While this may appear to contradict the well-known “pay yourself first” principle, it reflects the practical realities facing millions of households.
Transport costs, rent, utilities, education expenses and loan repayments frequently absorb the largest share of monthly income before any discretionary funds become available.
Importantly, this behaviour extends beyond younger generations. Standard Bank’s broader customer insights indicate that many South Africans save what remains after covering essential expenses rather than prioritising savings upfront.
The challenge, therefore, is less about financial discipline and more about financial capacity.
Asset Ownership as a Form of Saving
One of the report’s most compelling insights is the growing recognition that asset ownership itself represents a powerful form of wealth creation.
Purchasing a home, financing a reliable vehicle or improving an existing property may not increase a person’s cash savings, but these investments often generate long-term financial value.
Similarly, responsibly using credit to establish a positive credit history can unlock future opportunities that might otherwise remain inaccessible.
For many first-generation wealth builders, these milestones represent significant financial achievements.
Unlike many developed economies where wealth has accumulated across multiple generations through inherited property, businesses and investments, South Africa’s democratic era has provided only about three decades for many families to begin building generational assets.
That historical context fundamentally changes the way financial progress should be understood.
Forced Saving Through Ownership
Home loans and vehicle finance also introduce another important concept: forced saving.
Unlike voluntary savings, which can easily be sacrificed when budgets tighten, monthly repayments steadily build equity over time. Every instalment contributes to ownership, creating long-term value while improving current quality of life.
For households balancing immediate needs with future aspirations, asset-backed finance often provides a more structured pathway to wealth accumulation than relying solely on discretionary savings.
Redefining Financial Success
None of this diminishes the importance of saving.
Emergency funds, retirement planning and long-term investments remain essential pillars of financial security.
However, South Africa’s economic realities require a broader understanding of what financial progress looks like.
Many households are simultaneously trying to improve their living conditions, support extended family members, build careers and establish assets that future generations can inherit.
Viewed through that lens, today’s financial decisions tell a more hopeful story.
Rather than reflecting excessive consumption, many South Africans are laying the foundations of generational wealth for the first time.
The generation purchasing homes, financing vehicles and investing in education today may ultimately enable their children and grandchildren to enjoy the financial stability that makes higher savings rates possible tomorrow.
South Africa’s challenge may therefore not be that its people are failing to build wealth—it may simply be that they are building it differently.
