While earning a steady income may only happen when you reach your 20s, adopting simple money management tips and habits as early as possible will put you in a far better financial standing from the get-go.
Since hindsight is 20/20, this Youth Month some top executives at TymeBank, South Africa’s fastest-growing digital bank, share advice they’d give their younger selves about money.
Taking on odd jobs and avoid splashing out
Ayn Brown, Chief Human Resource Officer, believes it’s very important to do weekend work or odd jobs from as young as 16 to start earning a small income. It teaches you an appreciation of how hard money is to come by – and that in most cases you need to work to earn it, she says.
Speaking to her younger self, she added: “Start saving 20 per cent of each paycheck and bonus or birthday gift you get. Yes, you won’t go out as much as your other friends, but you’ll be there for the important parts. And don’t touch this money until ‘one day’- you will know when that is. Looking back when you’re older, it will be one of the best things you did, and why you will have a great little nest egg to travel the world with zero debt.”
Ayn says it’s important to also save 10 per cent of your income for emergencies or ‘life just happens’ items such as getting new tyres when your tread wears out. “These events come along when you least expect them and you’ll need access to cash to fix the unexpected glitch.”
Her other essential tips: “Avoid opening store cards, buy clothes cash, don’t skimp on insurance and only buy second-hand cars.”
Do more with less
“All those things that you think you need, you don’t really. Have fewer things. And when you do buy anything, invest your time to pick only the best at the best price. A good life is about quality, not quantity.” That’s the advice TymeBank Co-Founder, Coen Jonker, would give his younger self.
Learning is among Coen’s top tips. “By far the best investment you and your family can make is in learning. Investing in your knowledge and skills (formal and informal education) will give you the highest return of any investment that you can make. If you want more money, invest in yourself. You are the money-making machine. If you are at the top of your game, the money will follow.”
Learn to budget, understand credit and know the difference between a “need” and a “want”.
Tauriq Keraan, Chief Executive Officer, says “budget properly so that you can start saving when you’re young. The compound effect it has over many years is very powerful – as you earn interest on your savings’ interest – but you will miss out on this effortless way of growing your money every year you miss out on saving.”
He also believes that you should not cash out your pension when you leave a job given so few people can afford to retire. Instead, keep this invaluable nest egg for later on in life.
Lastly, he says: “The best way to create excess money is to start and grow your own business. However, it has to be the right business, in the right space, at the right time.”
Head of Marketing, Linda Appie, says it is important to respect and save money. “It’s also critical to avoid borrowing what you can’t afford to lose. The other thing to remember is that store cards are necessary only as a means to build a credit record and must be paid off every month.”
Cheslyn Jacobs, Chief Commercial Officer says that the number one thing that he would advise his younger self is that it is never too early to start saving. “The sooner you start and the more consistent you are, the more powerful the discipline becomes. It is not about the amount, it is about the behaviour,” he says.
“I would also tell myself to make sure I know what my financial “needs” are vs. my financial “wants”. It is the “wants” that reduce our buying power and eat into our disposable income.”
You’re never too young to start saving; spend wisely and when you buy, go for quality vs quantity; find odd jobs and invest in your own education – these are just some of the smart money moves you can make towards a prosperous financial future.