Looking back, most of us can spot financial mistakes we wish we hadn’t made. If only we’d been told about compound interest or the dangers of debt when we were younger! Maybe we wouldn’t have taken out a second credit card to help pay for the first. Maybe we would have started investing from our very first paycheck. 

To get ahead of all those worrying “maybe’s,” let’s look at the money lessons we wish we’d learned sooner. We trust that this information will help you avoid the same pitfalls and enjoy a brighter, more financially stable future. 

Money Lesson 1: Save Early, Save Often 

The earlier you start saving, the more you benefit from compound interest. Even if it’s just a small amount, like R200 a month, starting in your 20s can make a huge difference by retirement. 

Wondering what compound interest is? Simply, it’s when you save money, as well as earn interest on those savings. You can also earn interest on the interest itself. Chat to a financial consultant to make sure that you’re tucking your money away into the best type of account to reap these benefits.  

The Lesson: It’s not about how much you save, but how long your money has to grow. 

Money Lesson 2: Budget For Everything 

You know what they say… you can’t manage what you don’t measure, and this couldn’t be truer than when it comes to money matters. Creating a budget lets you see exactly what is coming, where your money is going, and ensures you’re prioritising the essentials. It also helps you avoid impulse spending, which adds up fast. 

The Lesson: A budget isn’t restrictive, it’s empowering. 

Money Lesson 3: Don’t Let Debt Spiral 

Credit cards and loans can be useful tools, don’t get us wrong. You shouldn’t feel shame or be scared of using these solutions as and when it is necessary. That said, they can also trap you if you’re not careful. The interest rates on credit cards is among the highest in South Africa, with some types of loans not too far behind.  

It’s best to avoid taking on more debt than you can realistically repay, so be very careful with how you use these lifelines as they can easily turn into dead weights that drag you down. 

The Lesson: If you can’t buy it twice, you probably can’t afford it. 

Money Lesson 4: Invest In Yourself 

Education, skills, and personal development are some of the best investments you can make. Think of how much further you can go in your career or what kind of income your side hustle could contribute to your monthly earnings. These investments could quite literally pay dividends for the rest of your life. 

The Lesson: Your earning potential is your greatest asset, so never stop improving it. 

Feeling informed?  

Our hope is that by learning these money lessons early and implementing them as soon as you can, you will be in a position to take control of your financial future and avoid unnecessary stress. 

Don’t forget that AA Inform is home to a range of useful financial tools and resources that can assist you along the way, including access our Monthly Personal Budget Calculator.