FIRSTLY, congratulations on completing your degree. That is no mean feat.
Next you managed to craft a winning CV, ace the interview and land a coveted spot on a prestigious graduate training programme or a permanent position at the company of your dreams. This is cause for celebration.
Then you received your first payslip and realised that after tax deductions, your net and your gross salaries are like distant cousins. Sadly, you are still a good few years away from being able to afford that shiny new Mustang.
Scarier still, if you are 21 and you plan to retire at 60, you are 468 pay days away from your final pay cheque. It suddenly seems a lot closer than you thought, right?

Welcome to the real world. Being an adult is tough. But if your ambitions are as high as your taste in cars is refined, there is absolutely no reason for you not to achieve the lifestyle you aspire to.
Below are some pearls of wisdom for young graduates who want to make sure that their money is working as hard as they are.

Step 1: 

Career planning
Because we are all unique, everyone’s career trajectory will look different. There are as many different approaches to career planning as there are careers and personality types.

Pantser, plotter or plontser? 

Some graduates are “pantsers”, the happy-go-lucky types who prefer to fly by the seat of their pants.
Others are “plotters”, with a list of macro and micro goals and a succession of five-year plans.
Then you get the “plontsers”, who are a bit of both – they know in which direction they want to go, but are willing to change course should opportunities arise along the way.

Mobility, security or flexicurity? 

None of these approaches are right or wrong.
But it is useful to know which one you identify with most, so that you can explain or justify your preference for mobility, security or flexicurity – to yourself and others – as you start carving out a career for yourself.
Although the gig economy is growing – thanks to advances in technology which is allowing more people to work remotely – for many freelancers and consultants, the flexibility often fails to deliver the dream.

Going it alone is a lot more difficult than most people realise, especially when you are starting out.
A passion project or side hustle alongside a stable nine-to-five job – with its paid annual and sick leave, medical aid and retirement contributions – is probably the most realistic compromise for graduates with entrepreneurial dreams. At least until you have built up a good credit score and have decent savings to fall back on.

Step 2: 

Lifestyle financial planning
Creating a budget is the crucial first step in mapping your goals to a financially secure future.
Tip: A good rule of thumb when dividing up your take-home salary is the 50/30/20 rule: 50%on needs, 30% on wants and 20% on savings and debt repayment.


This portion of your budget goes to essentials like rent, utilities, groceries, short-term insurance policies and travel expenses to and from work.
If you have a car loan or a credit card, the minimum monthly instalment also falls in the needs category, because if you fail to make a payment, it will have a negative impact on your credit score.
Any payments you manage to make over and above these instalments fall into the savings and debt repayment portion of your budget.


This portion goes on discretionary or lifestyle spend. This includes cellphone contracts or airtime, eating out, takeaways, clothes shopping, gifts, visits to the salon or barber, holidays and so on.

Savings and debt repayment
Last, but certainly not least in terms of importance, this portion should go to building an emergency savings fund, a diversified investment portfolio and of course, repaying debts.
With a combination of inflation and increased life expectancy, the sooner you get started on your savings and investments, the better.
If you take enough risk with your investments when you are young, you will reap the rewards down the line, as market volatility tends to reduce over time and the power of compounding kicks in.

Good vs bad debt 

Knowing the difference in the context of an overall financial strategy is a vital part of reaching financial stability and generating wealth.
Good debt can help you achieve your goals, while bad debt is expensive and can derail your goals.
Home loans and student loans, for example, are considered good debt, because they can be used to generate long-term value.
When you finish paying off your home loan, you should have a tangible asset with a value that outpaced what you originally paid for it, including the interest.

Tip: It is always best to pay off the outstanding balance on any high interest-bearing loans as soon as you possibly can. Even if you just put in an extra couple of hundred rands a month, you will shorten the period of the loan and save yourself thousands on all the interest you would otherwise have paid over the full term of the loan.
It is a commonly held belief that money cannot buy happiness. However, we are willing to bet that most graduates would rather cry in a Mustang than on a bus.

The conscious decisions you make and the plans you implement now will all have a direct bearing on the quality of life you will be living in the decades to come.
Ask yourself: Where do I want to be in 468 pay cheques time?

Thabo Masete is Human Resources director at Ford Motor Company of Southern Africa.

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