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Financial hacks every young professional needs to know to survive 2020

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Jake Willis is the CEO and co-founder of Lulaway, a company that has grown from a single internet cafe to an organisation that drives high-impact youth employment solutions on a national scale.

Financial literacy in the current South African economic climate is pivotal. It is inherently the link between maintaining some sort of financial stability in uncertain times and completely going off the rails. For young professionals who have recently been integrated into the labour market, becoming financially perceptive early on is crucial.

Understanding how to navigate your way around money is the first step in ensuring that the knock on financial markets, and the increase in petrol prices, rent and household essentials, does not affect your pocket so much that you have no way of making it through difficult times. Because of this and the socio-economic challenges that plague our country, young professionals need to be smart with their finances. 

Why should financial knowledge be top priority for young professionals? Here’s why:

  • For starters, it helps you optimise your income;
  • You can manage your money better, prioritising your needs over non-essentials;
  • It helps you find ways to save where you can;
  • It helps you to plan around your future and goals;
  • You become more disciplined around money matters; and
  • It goes hand-in-hand with your overall wellbeing because financial literacy incorporates all other facets of life.

So, you’re young, vibrant and new to the world of work… where do you start? 

Have an emergency fund 

It might seem passé and unrealistic, but the notion of saving 10% of your monthly income is actually an important financial hack to adhere by. You can gradually increase the percentage as your earnings increase, but starting as small as 10% is the bedrock from which most of your bigger financial plans will stem. 

Having an emergency fund will help you manage financial setbacks that might arise unexpectedly such as medical bills and retrenchment.

The idea is to have access to funds during financially trying times, but you still need to tread carefully so as to not utilise all your savings at once. Save as much as you can. 

Manage your credit 

Having credit is usually encouraged, but the reality is that credit cards, loans, store cards etc almost always end up costing you more than you bargained for. There are tricks in managing your credit, to avoid debt, missed payments and a bad credit score:

  • Always pay your credit accounts on time.
  • Try to pay as close to the full amount as possible, instead of the minimum that’s due.
  • Learn to be disciplined in order to stay on track with your payments.

Don’t have too many accounts or credit cards. Having a good credit score is important, but it can be achieved with fewer credit cards/store cards. 

Understand banking costs

As a young professional, you need to understand that banks don’t all work the same and as such, their banking fees will also differ. The bank fees that seem small and unnoticeable ultimately accumulate into thousands of rands that could have ideally gone into other areas of investment for you.

Choose a bank that considers your needs and can offer rates that you can afford.

Pace yourself 

Becoming financially stable takes time and requires planning and discipline. As a young professional, the earlier you start investing and saving, the better. BM

Jake Willis is the CEO and co-founder of Lulaway, a company that has grown from a single internet cafe to an organisation that drives high-impact youth employment solutions on a national scale.

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