When it comes to our financial priorities, there are so many things we want to achieve, such as paying off debt, building emergency savings, investing for our children’s education, paying off the mortgage and still having enough to save for retirement.

The pressure to achieve all of these goals can become overwhelming. Farzana Botha, segment manager at Sanlam, gives us some tips on how to set our financial priorities.

Financial priorities for someone who is just starting out

Let’s talk about young people who have just started working. They are told that once that salary hits their bank account, they must do this, they have to do that…. but they still have to pay for their food, their rent, their clothing – and they have a life they want to live!

What should the financial priorities be for someone who is just starting out?

We saw during Covid how important it was for people to have some savings put aside. Sanlam surveyed 1 200 people, and 56% said they wished that they had saved more, which would have given them some sort of preparedness for what Covid brought.

That emergency fund would have allowed them to feel prepared for what they were facing. Having some money put aside contributes so much to financial resilience and mental resilience.

When you’re young, the compounding effect of saving just R100 or R200 is incredible. If we could just get that message through to young people. It doesn’t have to be a lot of money. If you start when you’re young, you can put away less money than if you start later. The catch-up game is a losing game.

How should we prioritise fun?

How do we have fun with our money? And what about those “wants” – because life is very boring if we just use our money for things we need and for saving for our retirement. Surely we need to do some living now?

We can delay gratification and we can plan for the fun that we want to have in the grandest way possible.

You can say, “I want to have a grand wedding,” or “I want an overseas holiday.” Those are things that I can envision for myself, and I can plan ahead.

I can then enjoy these things fully because I prepared for them. I know that there are no dire consequences, because I didn’t use debt to pay for these treats. I prepared for them properly, and now I can enjoy them.

If you don’t set a goal, you will miss every time. When it comes to setting your financial priorities, don’t get overwhelmed. Rather see it as taking control. That way, you have a clear roadmap of where you’re headed, and what you need to do along the way to turn those goals into reality.

The secret to achieving your goals is planning for them.