Managing your own money for the first time is empowering – whether it’s an allowance from your parents, income from a part-time job, or your first salary. Being responsible for your own finances can be intimidating, but it can also give you a feeling of control as you plan the future you want to build. However, there’s a lot to learn about how to deal with money management that isn’t taught at school.

Many people make the mistake of not paying attention to the basics. If you don’t understand why budgets, interest rates, and your credit record are important to your financial health, it’s easy to let your finances spiral out of control.

Here are a few lessons that too many people have had to learn the hard way.

Top 8 financial basics

1. A budget is crucial, not optional

No matter how much you earn, you should always work according to a budget. Budgeting is about discipline, so that you don’t live beyond your means and can get into the habit of saving and investing. Even the most basic budget will help you understand what you earn, what you spend, and what you should be spending. Without one, it’s easy to overspend and go into debt – and if you rely on credit to get you through every month, you can get trapped in a cycle of paying off interest, but never actually clearing your debt.

2. Your credit score matters

Your credit score isn’t just a random number assigned to you – it’s your fast track to better credit offers and interest rates when you take out a loan or credit card. Based on your credit history, your credit score tells lenders how reliable you are with money. So apart from affecting your credit applications, it can also influence your ability to rent a home, get a phone contract, or buy a car. Your score can even affect your insurance premiums. If you’re a Nedbank client, you can easily check your credit score and the factors that are affecting it on the Money app.

3. Investing is as important as saving

Savings and investments are not the same thing – to manage your money properly, you need both. Savings should be available quickly and easily to give you financial breathing room if there’s an emergency or you lose your income. Investing, on the other hand, is how you grow your money over time, and the most effective way to do that is by putting it away for the long term. Investment products generally lock up your money until a set date, and they may impose notice periods or financial penalties if you withdraw from them early. This encourages you to stay invested and build your wealth.

4. Don’t delay investing for your retirement

Retirement investments are a good example of how effective long-term investing can be. If you reinvest all interest and other payments throughout the life of the investment, the compound interest will add significant growth. The more time you give an investment, the more it can grow through compound interest. Retirement might seem far away when you leave school, but the earlier you start saving, the less you’ll need to contribute to retire with the same amount. Or you could start in your early 20s, contributing the same amount you would have, had you started in your 30s, and grow a significant sum for a more comfortable retirement.

5. Always read the fine print

Whether you’re signing up for a student loan, gym contract, or cellphone deal, don’t skip the fine print. Hidden fees, interest hikes, and automatic renewals can come back to bite you. Take the time to read and ask questions before you sign anything – you’re entering a legally binding contract that can be tricky to cancel without penalty fees.

6. Check your bank statements

It’s easy to ignore your bank statements when most of your transactions are digital – but that’s exactly why you need to review them regularly. Some transactions don’t trigger notifications, so a careful review of your bank statements helps you know exactly how much is going in and out of your account, and why. You might be paying for services you no longer use – or worse, you may have fallen victim to debit order scams or hidden fees.

7. Balance generosity and your own needs

It’s natural to want to help the people you love – but giving away too much can leave you in financial trouble yourself. Boundaries are important.  Make sure you’re not helping others at the expense of your own stability.

8. Forget keeping up with the Joneses

Trying to match other people’s lifestyles – especially if they earn more or have different priorities – can leave you financially overwhelmed. Social media doesn’t help either. Stay focused on your own goals, your budget, and your version of success.

Start growing your money with Nedbank

These are the most important financial pillars to get right from the start. There’s a lot more to know if you want to grow your wealth, but you’ll learn more as your needs and goals evolve. Mastering these basics will give you a strong foundation.

If you need help taking the next step, explore our bank accounts, savings and investment options, and expert personalised guidance.