If you’re reading this, there’s a good chance you didn’t start a retirement account with your first paycheck – despite what your parents told you. The bad news is that if you had put a portion of your very first paycheck away, and did the same from every subsequent check, you would have done better financially than if you start putting money away today. Compound interest is an incredible, yet tricky thing.

The good news is that it’s not the end of the world if you are reading this in your 30s and are still not sure what to do with your money. It is up to you now, however, to learn to master your money as soon as possible so that you can set yourself up for a stress-free future. Here are a few tips to get you on the right track:

Change your values

We’re taught to live in the now, to be more present – it’s all about carpe diem. And there is some value in that, but not when it comes to money. Do yourself a favour, and instead of splashing out on things that you want now, learn to be frugal and happy with what you already have. Have the patience to save, work hard and wait for the things you want. It’s easy to get carried away while living above your means, but you’re going to pay for it – pun intended. Learn to live within your means because satisfying present you may just put future you in a difficult position.

Learn to budget

An integral part of effectively managing your finances is learning how to budget and then sticking to that budget. Resist the temptation to make a reservation at that fine dining restaurant you’ve wanted to try out for ages after seeing the lump sum in your account on payday. You need to ensure that you have put aside what you need to save and your monthly expenses before you make it rain. Putting your savings away is the easy part, but it can sometimes be tricky to know what of the remaining amount can be used as you please and what is strictly for monthly expenses. That’s where calculating what each of these figures are is a great idea. If once you have done that you have any money left over, it’s a good idea to pay off any outstanding debts or add it to your savings. 

Track your spending and stick to the plan

One of the best ways to figure out your budget, is to start tracking what you spend every month. That lunch you buy every day for work could be seriously eating away at your cash flow every month. If the idea of manually writing down every purchase is too much and gives you anxiety, then opt for a budgeting app like 22seven. This app can help you track everything you spend by linking to your accounts and can even help you set up a budget. The important thing is to ensure that you take your savings out the minute your salary comes in, and account for any debit orders that come off. Once you know exactly what you have left, try work with that, but learn to live on a smaller budget.

Get fin-tech savvy and cut your banking costs

If you don’t already, opt for digital banking services over ATMs and banking inside branches. By using online banking and your banking app to check your balances and make payments, you can cut banking costs significantly. Banks are making their digital banking services cheaper to incentivise their customers to use them over traditional banking methods. And by coupling digital services with a low-cost bank account and following best practices, you’ll quickly realise how much difference it makes.

Go green

Implementing green practices day-to-day positively impacts the planet and your pocket. Saving water and electricity, for example, will save you quite a bit of money over time, so can walking and cycling to work (if that’s a viable option for you). This only truly works if everyone in a household does their part, so if you live in a shared house or apartment, do what you can to get your housemates on board.

Work hard, but in a job that’s worth it

In today’s job market, keep in mind that you’ll have to be a go-getter, resilient and determined – it may take some time to find the best fit for you. That’s totally normal, and it will pay off to be patient. Signing on to a dead-end job that offers no opportunity for growth out of desperation is just going to cost you valuable time.

Create an emergency fund

Everybody should have an emergency fund for situations or events that crop up that haven’t been budgeted for. Create a savings account especially reserved for this purpose, and make sure it’s one that you can access in a hurry. Look for an option that has an interest rate, or average rate of return, that beats inflation. It’s better to have an emergency fund set up where you earn interest as opposed to having to get a loan for an emergency, where, instead of earning interest, you have to pay interest. The aim of this account total should be six times what you spend every month - so if you're spending R10k a month, you should aim to have at least R60k available at any given time.

Start saving for your retirement today

If you haven’t already set up something for retirement, even if it’s a savings account, start doing so today. Familiarise yourself with the different investment vehicles and choose one that fits your needs best. Many people tell themselves that they will start saving when they can afford to, but the truth is that you can’t afford not to save. Start saving now even if it is just a little bit every month.

Borrow wisely

If you have an emergency fund, you’ll be covered for most emergency expenses. However, some expenses might exceed that fund. In such cases, you will need to have credit available to make up the difference. But credit shouldn’t be used for luxuries or trips overseas. The same applies to personal loans. Only take out personal loans when it’s to afford something that will further yourself in some aspect, a course or an asset that allows you to realise your potential. You should take every opportunity to invest in yourself when it comes to skills or qualifications that would make you more valuable to an employer or that would better equip you to be successful in your own business endeavour. But borrow wisely and only when necessary.

Establish a good credit score

Building a good credit score in this day and age, is just a wise idea. You might want to finance a car or buy a house one day, and this is something that could make or break your potential to get a loan. However, as with the above point, use credit carefully, and if you want to have a credit card, use it either as a debit card (where you put money onto it and only use what you have) or make sure your limit is low and you are able to pay it off every month. Getting yourself into a habit of credit is a terrible idea, so borrow wisely with the intention of building a good credit score

Learn more

For more useful money-related tips, sign up for our Money Mailer. In this free monthly newsletter, we serve up articles on topics ranging from saving to borrowing and everything inbetween. If you've ever wanted to know how to save for university, how to reduce your living expenses, or how to improve your credit score, the insights in these articles can leave you wiser, wealthier, and better equipped to make the most of your money.

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