Do you want to get the most out of your first salary?

01/08/2018 00:00:00

Earning your first salary is an exciting, life-affirming time. It might be tempting to blow your cash on a new wardrobe, luxuries or spoils for family and friends – but if you’re smart with your planning, you could make that salary work extra hard for you.

Below are our top five tips that will help you get the most out of your first salary:

  • Budget

Once taxes have been deducted and your bills have been paid, you might be disappointed to see how much is left… unless you’ve already budgeted! A budget helps you organise and plan your money, allocating your income towards expenses, savings and debt repayment, and ensuring you always know exactly how much money you have. Many people avoid budgeting because it seems too difficult, but there are many online tools and mobile apps that make it easier. Click to explore this Personal Budget Planner 

  • Pay off your debt

Start by paying off the debt with the highest interest rate – this is usually a credit card. If you have a student loan, this repayment can also be quite hefty and can take years to clear, so start as soon as you can.

A Debt Consolidation Loan can help pay off your debt through one single loan. With African Bank’s Consolidation Loan  you can pay off up to five loans with low repayments and flexible terms. (Please note that Consolidation Loans cannot be used to pay off student loans or revolving credit.)

  • Start saving

Paying off your debt is important but getting started on your savings is equally important. If an emergency comes up, it’s helpful to have an emergency fund of savings to dip into rather than getting into further debt to deal with whatever the problem might be.

The earlier you start saving, the more money you’ll have – thanks to Compound Interest. If you invest your savings in a smart investment product, such as African Bank’s Fixed Deposit account you will start to earn interest. If you continue to save that interest, you begin to earn interest on the interest. Your money works for you! (Not sure how it works? Check out this vlog where we break it down for you.)

Tip: Do your research before you agree to any investments – look for products that offer cost-effective and transparent fee structures. (Read more here: Want the best interest rate?)

  • It’s never too early to think about retirement

Yes, of course the LAST salary of your career is the furthest thought from your mind when you’ve just started earning your FIRST salary – but start planning for your golden years now and Future You will be sitting pretty!

In South Africa, you can choose to save for your retirement through retirement annuities (RAs), pension funds or provident funds. Some companies offer an in-house pension or provident fund. However, a recent Moneyweb article states that of the 16.1 million employed South Africans, only 40% have access to retirement funds as a condition of service.

If your employer doesn’t offer one, it’s wise to invest in a RA. RAs also offer tax benefits, so you win in more ways than one. If you’re investing in a RA, be sure to have the amount debited from your account each month and consider it as a payment to yourself.

  • Your earning potential is your biggest asset – look after it

When you first start your career, your biggest asset is your ability to work and grow your career over the years to come. Protect yourself from unexpected health issues with medical and life insurance policies. Medical aid can be as basic as a hospital plan and you can choose a life insurance option that requires a minimal initial investment. Speak to your financial advisor to find the right fit for your income and your needs.

The same Moneyweb article quoted above reports that when it comes to medical aid, only 25% of South African companies offer employer-managed medical schemes, leaving most workers to make their own decisions.

Our most important tip?

Remember that many of the financial decisions you make today could have a major impact on your long-term financial future.

Click here to find out more about African Bank’s investment products, ideal for recent graduates about to embark on their savings journey:

African Bank Notice Deposits 

African Bank Tax Free Investments


Up Next

Our top 3 tips for saving towards your future
Too much month at the end of your money? If you barely have enough cash to make it through the month, it might seem laughable to think you can actually save some money.;
Read more
Investing in women: An African Bank priority
Many women are now the main breadwinners in their families and form the support structures of their communities.;
Read more
Three types of credit card fraud – and how to protect yourself
Read this blog post to familiarize yourself with these scams and know how to protect yourself.;
Read more
Know your rights when applying for a loan
With times being so tough for many consumers, applying for a loan could give you the means to change your circumstances. ;
Read more
Grow your money
The flexible nature of working from home is appealing for new moms and many opt for this when the pitter patter of little feet is on the horizon. ;
Read more
Getting to know Basani Maluleke
A new era started at African Bank on 1 April 2018, the day Basani Maluleke, was appointed as our CEO. Basani follows in the footsteps of Brian Riley, who saw the Bank through curatorship and laid the foundation for the exciting future that lies ahead of us.;
Read more
How to improve your credit score
Have you ever applied for credit and been turned down because of a negative credit profile or because you were considered high credit risk? For many of us this often comes as quite a shock. ;
Read more
Three tips: How to use your credit card wisely
There are more than 8.8 million credit cards in issue, and more than 38 types of credit cards available, in South Africa. South Africans have on average one credit card. So, there’s a good chance that you are one of those South Africans. Question is, are you using your credit card wisely? ;
Read more
Dad, here’s how you can be your child’s financial superhero
Fathers are often their children’s first real-life superheroes.Children do as we do, not as we say. So dads, our question to you this month is – are you modelling good financial behaviour?;
Read more
Saving to educate your children? Get the most out of your money
There is no greater gift that you can give your child than the gift of a secure education.We all want to give our children the very best, however, ensuring that you give your child a quality education costs money – and it is often the kind of money that most of us simply do not have.;
Read more
Ways to save on your teen’s matric dance
It’s that time of year again when teenagers and money-strapped parents begin planning for the big Grade 12 Matric dance. Peer pressure often drives families to spend outrageous sums on their son’s or daughter’s dance but there are still ways to look good without totally breaking the budget.;
Read more
A world without hunger is possible
Imagine this: A world without hunger! This is the vision of Rise Against Hunger; an organisation dedicated to ending hunger and malnutrition by 2030. As African Bank, we believe in this vision and as a team, we will be showing our support by helping pack 9720 meals for Early Childhood Development (ECD) centres, which is enough to feed one ECD centre for a complete year! ;
Read more
Want the best interest rate?
When shopping around for the best interest rate, don’t be fooled by terms such as “market-leading”, “best in SA”, “highest”. Rather do some investigations, find out how interest works and in the end, make sure you’re comparing apples with apples.;
Read more
Find out why these Smart Girls Rock!
Find out why these Smart Girls Rock! In honour of Women’s Day this year, we touched base with some of the most inspiring women we know: The young ladies from our Smart Girls Rock mentorship programme.;
Read more
Basani Maluleke’s top life lessons
You don’t get to be the CEO of a bank without determination, hard work and a level of self-awareness that helps you overcome the challenges that surely crop up along the way.;
Read more
Are you being fraud savvy with your bank cards?
With criminals getting more and more sophisticated with their fraud scams, stolen cards, counterfeit cards and card-not-present (CNP) fraud still remain the three most prevalent types of fraud used to defraud people. That is why it is important that our customers know what each of these three types of fraud mean and how to protect themselves.;
Read more
Single Parenting
Single parents are often faced with double the work and double the stress – and half the income. However, with careful planning and discipline, it is possible to set the foundation for a secure financial future for you and your children.;
Read more
8 Signs of financial abuse
If someone forcibly controls another person's money or other assets, it is financial abuse – and it occurs in almost all abuse relationships.;
Read more
Babies are expensive! Here’s how to cope
There’s no doubt, babies are a celebration. But parents will also tell you there’s no escaping the many expenses that come with that little bundle. It can be overwhelming!;
Read more
 Do you want to be in control of your debit orders?
The biggest financial industry collaboration in recent years is ramping up across South Africa. Debit order abuse has been on the rise over the past few years, with an alarming increase in debit orders that are processed to bank accounts without permission from consumers. This is a concern not only for consumers and the banks in South Africa, but to the Reserve Bank. ;
Read more
Do you want to get the most out of your first salary?
Earning your first salary is an exciting, life-affirming time. It might be tempting to blow your cash on a new wardrobe, luxuries or spoils for family and friends – but if you’re smart with your planning, you could make that salary work extra hard for you.;
Read more
Tips to put some spring into your financial plans
Do you find yourself falling short every month because of the little luxuries you’ve indulged in throughout the month? This September, why not take a fresh look at your financial wellness and add a little spring into your planning!;
Read more
What does a technical recession mean and what is the impact?
Recession is defined as a substantial decline in the economy’s following five economic indicators: real gross domestic product (GDP), income, employment, manufacturing, and retail sales. ;
Read more
What will happen to your assets when you die?
Does setting up your last Will and Testament make you think of your mortality? This is the reason why many South Africans delay writing their wills; it’s something many only think of when confronted with a life threatening illness or accident.;
Read more
Understanding petrol increase
It seems like every other month we’re experiencing another petrol increase. The big question is WHY? We break it down for you in this blog post.;
Read more
Save money with these easy handmade gift ideas
Gift-giving budget might be a little tighter than usual this year. Don’t worry, we’ve come up with a range of easy handmade gifts suitable for young and old.;
Read more
Tips from an expert: Grow veggies, save money
We spoke to Joy Phala, the founder of Organic Kitchen Gardens, for some great advice on starting your own vegetable garden.;
Read more
25 ways to save money on travel
We’ve rounded up some of the best advice out there to make your next holiday a more affordable reality.;
Read more
Maximise your bonus with these 5 steps
Picture this: After a year of hard work you receive a year-end bonus. It’s tempting to gift yourself with an extravagant purchase but rather follow these steps to make your bonus work for you.;
Read more
Building wealth through investing
An investment into cash products can build wealth over the medium to long term and provide a steady and certain return over a fixed term.;
Read more

About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.