So, you’ve turned 21 and officially entered the realm of “adulthood” – congrats! But let me tell you, the independence you see in movies and TV shows, with fancy cars, apartments, and pets, is far from reality. My friends and I, like most young South Africans, have barely a penny to our name. It’s like that dream we had in third grade of becoming a millionaire by 18 is slipping away. Now we’re faced with the daunting task of figuring out how to #GetTheBag and live our best lives without breaking the bank.

On top of that, we’re constantly bombarded with ads and success stories about investing in cryptocurrency, hustling for multiple streams of income, and starting our businesses. While it’s great that money talk is becoming more common, all these buzzwords make it seem like financial success is just a matter of #GrindTillYouMakeIt. But the truth is, it’s hard to manage the money you don’t have or even know about yet (like cryptocurrency).

So, it turns out that I was a bit naive about money when I thought that all I needed to do to get a car was save up enough money to buy it outright. Little did I know that there are a whole bunch of hidden fees and costs that come with the territory, like deposits, insurance, and other sneaky expenses that are buried deep in the fine print. And let’s be real, most of us aren’t reading those terms and conditions like we should be. This is where financial mismanagement starts to rear its ugly head.

I also discovered that your credit score plays a huge role in determining your insurance premium. But wait, what is a credit score anyway? Basically, it’s a number that represents whether you have good or bad debt, and if you’re reliable enough (based on your credit history) to pay back what you owe in a timely manner. The thing is, most of us don’t have a credit score or qualify for credit yet! It’s all a bit overwhelming to be honest. When I was growing up, I always thought that debt and credit were bad things. I remember my grandmother even cutting up her retail store cards and muttering something about Satan under her breath whenever credit people called her. But as it turns out, there’s such a thing as good debt too! All of this made me feel pretty anxious because if I don’t even know the basics about money and how to manage it effectively, then how am I supposed to navigate the world of finances?

I read this article on Sanlam’s ‘Understanding good vs bad debt’; let me tell you, it was eye-opening. According to them, bad debt is an unnecessary debt you can’t afford to pay back, and it can mess up your finances in the long run. Think retail store accounts, yikes! On the other hand, good debt is when you borrow money to pay for something that will increase your net worth over time, like a home loan.

So, it’s important to know the difference between good and bad debt, right? And, not to be dramatic, but being an adult means being smart about money and avoiding bad debt. I mean, I know it’s hard with all the pressure to buy the latest “drip” and drink fancy drinks on credit, but we gotta resist that lifestyle we can’t afford. It’s about living within your means and saving for those rainy days.

But here’s the thing, even though it seems common sense, we still hear stories about celebrities who go broke after living it up for years. Like, what’s the deal with that? Well, could it be old bad debt? Let’s learn from their mistakes and ensure we’re making smart money moves, okay?

I’m sure you heard about the Saints nightclub scandal or watched it unfold on Instagram. In case you didn’t, some influencers were partying it up and booking VIP tables, dancers, and fancy liquor bottles, but then they didn’t pay their bills! Like, what? I mean, we all know what it’s like to feel that #FOMO and want to keep up with the cool kids but come on, you have to be responsible with your money, right?

What could be pushing people to spend money they don’t have? I mean, if one of our friends says they can’t afford something, we adjust our plans or help them out, no big deal. So why are these celebs and influencers, who have seen the consequences of bad debt firsthand, not learning from their mistakes? It’s like the clothes you wear, the drinks you drink, and the parties you throw might be fun in the moment, but they shouldn’t be on credit since they will not add value to your life in the long run. That’s the definition of bad debt, right?

As young people, we know this stuff, but we don’t always put it into practice. So what’s going on? Is it because we’re hanging out with the wrong crowd and making bad decisions? Or is it because we don’t have enough education about financial management? Let’s talk about it, people!

Tell us: why do so many young people struggle with managing their money, and what factors contribute to bad money management? 

If you enjoyed this article, read tips on how to make your money go further here.