With money not going as far as it used to, we’ve got to find more ways to make it go further
It’s no secret that it’s harder and more expensive to live well these days. With money not going as far as it used to, we’ve got to find more ways to make it go further. For those who have just gotten their first job, this can be daunting. The desire to spend that first pay cheque with abandon is strong but resisting it is important. From disability cover to basic budgeting, here’s how you can make responsible decisions.
Set a basic budget
Once you know what your salary is going to be each month, it’s time to lay down a few laws on how it’s going to be spent. We recommend an excel spread sheet with your income and expenses on. Remember to include savings each month as this should be treated as an expense so that you’re encouraged to put money away each month. Also, try to set a budget for things like entertainment so that you’re capped at a certain amount and don’t go overboard.
Contribute to cover
Medical aid insurance and disability cover are important types of personal insurance that young professionals need to have. From a health standpoint, medical aid will ensure that you don’t pay out crazy amounts of money for medical bills. If you can’t afford a medical aid with a savings, a hospital plan will do. You might want to also consider gap cover to mitigate potential shortfalls from hospital stays. A disability policy will help subsidise your income if you are left unable to work either temporarily or permanently. Although these are expenses, the peace of mind they bring is priceless.
Pay off debt each month
From student loans to credit card debt, allowing these to pile up is never a good thing. Not only is it stressful but it could result in a poor credit rating. By prioritising which debts to pay off, you can clear a little of the pressure off your plate. We suggest clearing the smaller ones first so that you can feel like you’re getting somewhere before you tackle the bigger ones.
Create a rainy-day fund
There’s nothing worse than needing cash in an emergency and realising that you don’t have it. This often leads to poor credit and a load of stress that you just don’t need. By setting a minimum savings amount every month, you’ll be able to have funds available for emergencies.
Save for your retirement
It’s never too early to start doing this. In fact, experts maintain that in order to retire comfortably, you need to be doing this as soon as you get that first salary. Many businesses offer a payment into a retirement annuity as part of their cost to company but this doesn’t mean that you can’t add a little more to that each month. Even if it’s R500, you’re still putting something towards your future.
We believe in you
At Compendium, we understand that you’ve got big dreams and are prepared to do whatever it takes to reach them. It’s why we offer a range of products geared towards young professionals just like you. For more on how we could help you, please click here.