What Financial Heritage Are You Passing On To The Next Generation?

Heritage Day may have been about the things families know how to pass down without thinking twice. Recipes, stories, traditions, languages, sporting memories and the rituals that somehow make their way from one generation to the next.

Money is different. It is often one of the subjects families are least comfortable discussing, even though financial habits can be inherited just as easily as family traditions.

As families gathered around the braai yesterday, conversations may have turned to everything from favourite recipes and family stories to sporting memories and the lessons handed down through generations. But Heritage Day also offered an opportunity to think about another kind of inheritance: the financial behaviours families are passing on.

The way children see parents and older relatives handle debt, saving, spending, giving, financial setbacks and financial risk can shape their own relationship with money long after they leave home. For Niresh Gopichand, Risk Director at Atlas Finance, that makes Heritage Month an opportunity to think about the financial lessons families are passing between generations.

“We tend to think of heritage as what we inherit,” says Gopichand. “But there is another kind of heritage: the habits and attitudes children pick up from watching how their parents handle debt, saving, giving and financial setbacks.”

He argues that when families do not talk openly about money, those conversations do not simply disappear. They can instead be replaced by messages coming from financial products, advertising, social media and increasingly frictionless ways of spending and borrowing.

So, while the braai may be over and Heritage Day has passed, there are a few financial questions worth keeping on the table.

Financial education does not always need to begin with a spreadsheet. For younger family members in particular, a personal story can be far more memorable than a lecture. It could be the car that was bought too soon, the policy that was allowed to lapse, the money lent to a friend and never recovered, or simply the experience of learning the hard way that earning more does not necessarily mean having more money.

Families can sometimes be protective of their mistakes, but those experiences can also be among the most useful lessons they have to offer. Talking honestly about what went wrong gives younger generations something practical to learn from rather than leaving them to repeat the same mistakes.

Financial decisions have become increasingly easy to make without much time to think about them. Gambling is one example. According to the National Gambling Board, South Africans wagered R1.5 trillion during the 2024/25 financial year, with online gambling accounting for a growing part of the market. Betting can now happen almost anywhere, including from a smartphone while watching a sporting event.

Buy Now Pay Later services have similarly become a familiar part of the shopping experience, allowing consumers to split payments at checkout. The convenience can make borrowing feel less like a financial decision and more like a routine part of shopping.

That does not mean these products are inherently the problem. The bigger issue is whether people understand what they are committing to and have the financial literacy to recognise the difference between convenience and affordability.

The National Credit Regulator's Credit Bureau Monitor has reported that more than 10 million credit-active South Africans have impaired credit records, representing roughly 36% of the credit-active population.

For families, this makes conversations about financial products increasingly important. Asking how many betting adverts someone remembers from the last sporting match they watched, or whether everyone knows exactly what their monthly debit orders are for, can be a simple way to start.

The same applies to gambling. An occasional loss is part of gambling, but secrecy, hiding betting activity or becoming uncomfortable whenever the subject is raised can be signs that a bigger conversation is needed. For anyone struggling to control gambling, the South African Responsible Gambling Foundation provides confidential support on 0800 006 008.

Supporting family members is part of everyday life for many South Africans. One person may pay school fees, another may support an elderly parent, while someone else may find themselves supporting several relatives soon after starting their first job.

There is nothing inherently wrong with helping family. The risk comes when the responsibility becomes concentrated in one person without anyone discussing what happens if that income suddenly disappears.

Investment portfolios are often assessed for concentration risk, but households can face the same problem. If one salary is supporting multiple people, families should know what the plan is if that income stops.

It is an uncomfortable conversation, but understanding who depends on whom can make a significant difference when circumstances change.

Estate planning is another area where families can discover gaps only when they are forced to deal with them.

Where is the will? Which policies are in place? Does anyone know about an old pension from a previous employer? Where are the important documents kept, and which institutions hold the family's accounts?

Legal Aid South Africa has cited estimates from the Master of the High Court that more than 70% of working South Africans do not have a will. Dying without a will does not mean there is no legal process, but it can leave families navigating an administration process at an already difficult time. Property can create additional complications, particularly where a family home remains registered in the name of a deceased parent or grandparent.

One practical starting point is a simple one-page document listing where important documents are kept, which institutions hold accounts or policies, and who needs to be contacted if something happens.

It may not have been the easiest conversation to have around the braai, but it is one that can save a family significant uncertainty later.

Some of the most valuable financial knowledge does not come from a financial textbook or an adviser. It is already embedded in communities. Stokvels are a particularly strong example. The National Stokvel Association of South Africa estimates that around 800,000 stokvels collectively move approximately R50 billion a year, involving more than 11 million people.

Their strength comes from simple principles: members contribute regularly, rules are agreed upon and participants hold one another accountable. Over generations, stokvels have helped families pay school fees, build homes and cover major expenses, including funerals.

That makes them part of South Africa's financial heritage too.

Rather than allowing younger family members to simply observe how a stokvel works, families can use it as an opportunity to explain how contributions are managed, who keeps the records, what happens when someone misses a payment and what safeguards are in place.

The lesson is not necessarily that every family should join a stokvel. It is that there is already a considerable amount of practical financial knowledge within communities that can be deliberately passed on.

The two-pot retirement system has also introduced a new financial conversation for South African households. The system, which came into effect on 1 September 2024, allows qualifying members to access a portion of their retirement savings before retirement, while the remainder stays invested for retirement.

Repeat withdrawals have since become part of the conversation around household finances. Momentum has reported that the average two-pot withdrawal has fallen to around R9,290, with roughly seven in ten claims below R10,000.

The system was designed to provide access to retirement savings when members face genuine financial pressure, but frequent withdrawals can also have a long-term effect on retirement outcomes.

There are also tax implications that are easy to overlook. Two-pot withdrawals are taxed at the member's marginal rate rather than using the more favourable retirement lump-sum tax tables, and SARS may deduct outstanding tax debt from a withdrawal.

That makes the two-pot system another useful subject for families to discuss, particularly when younger workers are deciding what to do with their retirement savings.

Heritage Day may have come and gone, but the conversations it prompted do not have to end with the last plate being cleared from the braai.

The day is usually about what we received from the generations before us. There is value in turning that question around and asking what we are passing forward.

The answer is not only property, savings or other assets. It can also be the way we talk about debt, whether we understand saving, how we respond to financial setbacks, whether we plan for death and retirement, and whether younger family members understand the decisions being made around them.

“You will leave your children your assets, but you will also leave them your habits,” says Gopichand. “A large inheritance disappears quickly in the hands of someone never taught to manage it. A smaller one goes much further when it arrives with the confidence to use it well.”

The braai may be over, but the financial conversation can continue. Sometimes, the most valuable thing a family can pass on is not an asset at all, but the confidence and knowledge to know what to do with it.