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Affordability Tips For Young Professionals

Transitioning to the professional world? Learn budgeting and finance tips for thriving in Johannesburg. Manage your money wisely while enjoying city life.

Congratulations on finishing your studies and finally entering the world of the workforce. How does it feel to be a professional with a title and a salary? It must be fulfilling but also daunting, especially when you think about the many bills and responsibilities that await you. Well, fear not because, in this article, we will give you some tips on how to manage your money, plan your budget, and make the most out of living in the city of gold without breaking your bank. Let’s dive in, shall we?

First Things First, Taking Control Of Your Finances Can’t Be Procrastinated

One of the first things you need to learn about budgeting and managing your finances is that it is better to start now. As soon as you secure your job and a salary, you need to start making good money decisions to avoid having to get yourself into credit or bankrupt yourself too soon.

Another thing to note with your paycheck is that you shouldn’t be surprised when the amount deposited is less than the gross wage you were promised. Look at your payslip; it will show your gross pay, any deductions, and your net pay, which is the amount you really get. Pay-as-you-earn (PAYE) income tax, your payment to the Unemployment Insurance Fund (UIF), and medical assistance or retirement contributions, if you're enrolled in your employer's retirement plans, are the most frequent deductions. As an example: after PAYE, UIF, and other deductions from a gross salary of R20,000, your net salary might be around R15,200 – that’s the monthly income you will have to work with when you plan your budget.

Now For The Tips;

According to the famous South African bank, Nedbank, another way to divide up your net salary that many young professionals find helpful is the 50/30/20 formula: allocating 50% of your net salary to essential expenses, 30% to lifestyle expenses and 20% to your future financial well-being – priorities like savings and investments (including home loan repayments if you own a home) and your retirement plan.

Rent, food, transit, water and electricity are all considered necessary costs when applying the 50/30/20 rule. These costs go towards your everyday essentials, but you may also make adjustments to your spending here by understanding the difference between wants and needs. Deodorant, for instance, can be regarded as a requirement, while a pricey designer scent is a want. Try putting cost-cutting strategies into practice, such as buying things on sale or in bulk so you can share the bill with a buddy, using less power by turning off equipment at the wall outlet when not in use, or reducing transportation costs by carpooling.

Lifestyle costs, which make up 30% of your budget according to the 50/30/20 model, include things like apparel, gym memberships, streaming services, hobbies, and entertainment. This is where you can cut back the most when living expenses are going up, or money is tight, allowing you to continue making investments in your future and paying your critical bills. That doesn't imply you can never enjoy yourself or pamper yourself; all it takes is the discipline to keep such indulgences precisely within the budgeted amount you've allocated for lifestyle costs.

Budgeting In The City Of Gold

One of the easiest ways to ensure you save on costs is to rent an affordable apartment, and because you are here, it means you know Johannesburg Housing Company has got you covered. Take advantage of our rental accommodation in the heart of Johannesburg at our buildings, such as Heritage View, Phumulani Gardens, and Brickfields, to name a few, and if you want to live in Jeppestown, there’s Jeppe Oval for you. Our rates are affordable, and we give our residents great value and community living while ensuring they are safe and taken care of.

So cut your budget a great deal and get a home with us.

Last Words

We know it is difficult to stick to a budget but trust us when we say it will be worth it. Don’t forget to have fun while being financially responsible and invest in a few money management channels like apps, YouTube videos and books. Your money should make things better for you, not bring you stress.