How to manage your money instead of letting it manage you

The Citizen

8 hours ago

Too many young South Africans believe they will only worry about money later instead of planning their money journey right from the start.
Young people must manage their money and not let their money manage them if they want to have a secure financial future. Money management is important.
Jessica Pillay, financial adviser at Momentum Financial Planning, says your first salary, side hustle or online gig is more than just income.
'Being young sets the stage for your journey to financial success. As South Africans gear up for Youth Month, it is time to flip the script.
'To be young is not just a phase but a launchpad, and the smartest way to get off the runway and soar is to prioritise money management and financial planning.
'Taking charge of your money early gives you a massive head start.
Financial planning is not about how much you earn, but it is about what you do with what you have and the habits you build along the way.'
She says that with youth unemployment remaining at record highs, rising student debt, and a cost-of-living crisis to contend with, building wealth can feel out of reach for young people, but small, smart moves today can unlock big wins tomorrow.
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Pillay says these money moves matter now:
#1: Start saving for retirement as part of money management
Yes, you should start saving for retirement as soon as you earn your first money. Pillay says compound interest works like magic over time.
Even if you save a small amount consistently from your twenties, it can snowball into a significant retirement nest egg. The earlier you start, the more time your money has to grow.
Many young earners do not even realise that retirement savings also come with tax perks. Contributions to retirement plans are tax-deductible, up to 27.5% of your taxable income. That means money back in your pocket while you invest in your future.
#2: Build your emergency fund
Just picture this: car trouble, broken appliances, job losses. Life happens. And when it does, an emergency fund is the financial safety net that will keep your life moving forward, Pillay says.
'Aim for at least three months' worth of essential expenses. It will help you to avoid debt and give you peace of mind.'
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#3: Do not confuse credit with cash in money management
Credit cards and clothing accounts can be helpful, but only when you manage them wisely.
'It is easy to fall into the trap of treating credit as money you have on hand, but remember debt comes with interest, and the more you borrow, the more you pay back. It does not take long to start drowning in it.'
Learning how to build credit responsibly, such as paying off balances in full and on time, can open doors later on, like qualifying for a home loan or better interest rates.
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#4: Protect yourself with insurance
Medical emergencies, accidents or a sudden disability can have long-lasting financial consequences.
'Young people often overlook insurance, but it is vital. Without medical aid or life and disability cover, one unexpected event can wipe out your savings or leave you financially stranded.'
Pillay encourages young people to ask questions and own their money journey. Financial advisers can help as they are not just for the wealthy or the old. They are coaches, mentors and sounding boards whose sole purpose is to help you weave through complex decisions and set achievable goals.
Whether you are planning your first big purchase, figuring out how to budget, or exploring investments, guidance from a trusted expert can help you avoid costly mistakes.
'Your first step does not have to be perfect, it just has to be intentional. You do not have to walk this journey alone. There is an adviser out there who is perfect for you and your money journey.