Fresh Out of Varsity? Here’s How to Save Your Salary

03 November 2017

It’s a struggle – living from pay cheque to pay cheque. It’s not ideal, but sometimes your expenses get the better of you. Whether you’re 20, 30 or 40 – spending money is inevitable. The trick lies in how you spend it – and if you are saving at all. Analysts say the average South African saves 8% of their salary. Where do you lie on that scale?

There are a couple of basic tips that can stretch your rands a little. The classic rule is the 50-30-20 rule: 50% of your income should go to essentials like rent, debit orders, and food, 30% should be spent on dinner or treats, and 20% should be saved. This does, however, seem like a stretch sometimes. We spoke to a couple of 20-something South Africans to find out how they make sense of their rands.

Chisanga Mubanga (24) is a strategist at an advertising agency. His struggles are synonymous with 20-something living: “I struggle to stay disciplined. I spend my more of money on lunch at work or eating out at restaurants than I spend at home or packing lunch when I have food in the fridge. It’s a waste of money, really.” However, Chisanga does have a plan when it comes to savings. “I have a 32-day notice account with an automated monthly payment.”

Yetunde Dada (25) lives in Pretoria, and works as a consultant. She also runs a blog on the side. “Whenever I get paid I immediately deposit money into my 32-day-notice account – especially when I’m saving for something like a trip. This account makes it difficult for me to access the money when I think I ‘need’ it. I always have a saving goal in mind.”

George Germishuys (25) is a Capetonian, and writes for a living. “I’m fairly level-headed when it comes to monthly expenditure, but I do seem to overspend on leisure activities. I don’t have a formal savings plan, but I do attempt to come in under my budget on a monthly basis. I then leave these funds in my formal account to create a buffer for a rainy day.”

Le Roux Fourie is a managing consultant at a big corporate – and he seems to struggle with the classic millennial dilemma: socializing. “I visit restaurants way more than I need to. I don’t necessarily have a set budget for dining out, and this leads to overspending. I really should limit this.” In spite of the occasional reckless spending, Le Roux is a pretty focused fellow when it comes to saving. “I’ve got a set savings plan. Something I found that works for me is to lay out my savings goals for the coming three years. My motivation to save on a month-to-month basis comes from a planned holiday abroad – it’s a solid plan which convinces me that putting that money away is absolutely worth it.”

Charl Neethling (27) is a teacher in the Mother City, and his focus when spending his salary has been to clear his study loan. “With that debt out of the way, saving is my priority for the next 5-10 years. I’ve got a few long-term investments in shares, but I try not to think about those. I know they’re growing super slowly, but they should come in handy one day.”

Saving is always challenging. Learn from your mistakes. If you want some tips on how you save your salary, tweet us or check out the options and find the product that suits your savings needs. We’d love to hear from you!

Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.