Your first years as a trainee may also be the first time that you’re earning any real money to speak of and it’s only natural to want to splurge a little - or a lot. That said, it might be wise to resist the temptation; the best time to start saving to set yourself up later in life is now.
It’s not to say that there is no room to treat yourself now and then, but budgeting cleverly now can mean you’ll be well on your way to buying that new car or house, or leaving for that dream European trip sooner than you think.
A good budgeting plan is to split your monthly salary three ways: 50% should be put towards your regular monthly expenses – rent, car repayments, gym, groceries and the like. Twenty percent is for saving – whether it is the money you allocate to retirement annuities or other investments, or simply that you put away, this is what will accumulate for your future. Finally, you’ll have 30 percent that is yours to spend, however you wish to spend it.
Of course, there are a few things that you should know. Paying off debt is an important first step to financial freedom. As you are well aware, debt incurs interest and interest costs money – so don’t ignore it. If you do have any debt, pay it off as soon as you can.
Another good idea is to put some money aside every month (it can be as little or as much as you can manage) for emergencies. It’s never pleasant to have to replace the tyres on your car, buy a new washing machine or pay a special levy to your complex, but if you have an emergency fund stashed away, it’s far less stressful than having to find the money in an already tight budget.
Budgeting experts also suggest under-budgeting in a way that helps you to ‘accidentally’ save. For example, if you generally spend R1 000 week on groceries, budget for R800 and see if you can manage to save that extra R200 – it all adds up in the end.
Remember though, you need to build a budget that you can live with – like anything else in life – if it’s not realistic, it won’t be sustainable.
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