Page 11 - TODAY Magazine Issue 1 2022 - Old Mutual

GOALS
> Pay off your student debt.
> Build an emergency fund that can cover at least one month’s expenses.
> Increase the amount of income you put away
to 20%.
BEING SAVVY YOUR MONEY
ISSUE ONE 2022 | 9
This is an exciting time! You’re settling into your career, possibly starting a family and maybe even looking to buy your first home. There are many big decisions to be made and so much life experience to gain. You’re getting into the swing of adulting and all the things that go with it, including getting serious about your money.
It’s also a time when it’s easy to let your spending get out of control, which means you have to be extra careful.
A good budgeting trick is to use the 50/30/20 rule. It’s not cast in stone, but makes a good starting point. Adapt it as your circumstances or priorities change.
Allocate 50% of your net (after tax) income
to essential expenses such as rent or bond repayments, groceries and school fees. Set aside 30% for the nicer things you want, but don’t necessarily need. Everyone has their own priorities and perspective on this, so decide
for yourself what you consider essential or not. And finally, use 20% of your income to pay off debt and build up long-term investments.
By now you probably would have taken
on more debt. Whatever the reasons and no matter how you feel about it, you do have to honour the repayment arrangements. Focus on paying off older debts such as student loans to avoid dragging them into your next decade.
An emergency fund is always super useful
to ensure that you can always make it through the month when life throws you a curveball. Just imagine having the equivalent of a full month’s expenses saved up as cash! It could make a huge difference in a crisis. Some people even manage to save up enough to carry them through for three or six months. The peace of mind this brings is worth more than the small sacrifice of putting away something each month.
HITTING YOUR 30s
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