Advice to young people entering the workplace

Mike Wood, director at Apio put these 6 pieces of advice together for young people preparing to enter the workplace.

Apio advice for young people entering the workplace

  1. Budget – and then stick to it! Being disciplined in this regard is one of the best ways you can save money and ensure that you do not waste your hard-earned money on unnecessary things. Budgeting doesn’t mean you have to give up fun for the rest of your life. By creating a budget, you’ll be able to see where your money is going each month and allocate funds to saving, bills and entertainment. Hold yourself accountable for sticking to your budget!

  1. Start an emergency fund. Another good way to save for financial hardship is to start an emergency fund. This will ensure that during any unforeseen circumstances you’ll be able to mitigate the risk of digging into short-term credit which typically attracts high interest rates. Avoiding these situations will go a long way in securing your financial future.

  1. Pay off your debt. While putting money into savings is a good way to prepare for your future, you should also be concerned about paying off your debt. You should be aggressive about paying off your debt and careful not to let your credit cards spiral out of control. Allocating additional funds into your debt, whether it be bonds, credit cards, overdrafts, other loans and car repayments is a great way of saving on the interest you’d pay over the term of these different debts. The quicker you are able to settle your debt, the more disposable income you’ll have to save and invest into long-term investments which will assist in creating wealth and allowing your money to make more money.

  1. Don’t wait to save and invest. Start Now! Saving and investing may seem like a challenge right now but putting away just a few hundred rand a week can have an enormous impact. Compounding is the 8th wonder of the world. Use your budget to see how much money you can put into your savings account each month. Ensure that you invest in the correct investment vehicles which take tax and liquidity implications into account.

  1. Save one-third of your income. If you aren’t sure how much you should save, we recommend saving one-third of your income if you are able to budget for this. By saving R1 out of every R3 you earn, you are making it easier on yourself to survive future financial difficulties, such as retrenchment, car repairs, home repairs, and other surprise expenses. Saving one-third of your income will also stand you in good stead for your retirement years and will go along way in helping replace the bulk of your income for as long as you may live.

  1. Speak to a professional about your goals and how best to achieve them. It helps to have a clear cut plan when to stick to when it comes to building wealth and as you go throughout your life. Take the time to set financial goals each year with your wealth manager to ensure that you are on the right path and are taking all the necessary investment options into account.

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