Discover essential financial strategies to make the most of your first salary in South Africa. This six-step playbook will guide you through budgeting, saving, and protecting your income, ensuring you start your financial journey on the right foot.
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The best advice you could get as a young person is to lose that either/or mentality. It’s about doing both, buying the things you need today, while making a contribution – however small – to long-term goals like investment and insurance, says Farzana Botha, Communications Manager at Sanlam Risk & Savings.
She says for many young South Africans, receiving a first salary is a significant milestone. After years of studying, internships, side hustles, or job hunting, earning a regular income brings a new level of independence. It also comes with financial responsibilities that many young adults are often unprepared to manage.
From budgeting and saving to managing credit and planning for retirement, first-time earners are expected to make important financial decisions from the outset of their careers. Yet financial literacy remains a challenge for many, she says.
Industry experts say that while much of the conversation around personal finance focuses on spending, saving, and investing, one of the most overlooked aspects of financial well-being is protecting future earning potential.
Recent research by Asisa found that South Africans under the age of 30 have only 32% of the disability cover they need and just 12% of the critical illness cover required to adequately protect themselves financially.
Financial experts say developing sound money habits from a young age can help build long-term financial resilience, regardless of income level.
According to Botha, one of the biggest obstacles to financial planning is the tendency to prioritise immediate needs and wants over long-term goals.
“It’s difficult to imagine our future selves, so we tend to take care of our present selves instead,” says Botha.
She says neuroscientists refer to this phenomenon as the “Stranger Effect”, where people view their future selves in much the same way they would view a stranger. This can make long-term planning more difficult and increase the appeal of immediate rewards.
However, Botha argues that financial planning should not be framed as a choice between enjoying life today and preparing for the future. “The best advice you could get as a young person is to lose that either/or mentality, it’s about doing both, buying the things you need today, while making a contribution – however small – to long-term goals like investment and insurance,” she says.
Affordability remains one of the main reasons young people delay investing or taking out insurance cover.
Botha believes the solution lies in making smaller contributions across multiple financial goals rather than focusing on a single priority.
“Do 10 small things, rather than doing one big thing and neglecting the other nine. Break your salary down into small chunks, and work towards each of your financial goals. Make small contributions towards savings, investment, short-term insurance, life cover, and so on. Even if your contributions are small to start with, you’ll still be putting yourself in a better position in the long run. And the good news is, as a young person, you can often get great deals on insurance cover,” she says.
The rise of social media has intensified pressure on young consumers to project success through lifestyle spending.
“This creates a subtle but powerful pressure to ‘keep up’,” warns Afua Darko, Business head at Sanlam Credit Solutions. “And it drives your spending decisions, which are sometimes supported by easy access to credit. The result is a focus on matching external expectations, rather than building long-term financial security.”
According to Darko, this pressure can encourage young earners to prioritise consumption over financial stability, often with long-term consequences.
While credit can help finance major purchases such as a vehicle or a home, experts caution that it should be used strategically.
“Credit itself is neither good nor bad. When used responsibly, it can be a powerful enabler,” says Darko.
She encourages first-time earners to obtain a free credit report from a reputable provider and review it regularly.
“Your credit report gives you visibility into your credit score and helps you track how you’re managing debt over time. It’s also one of the easiest ways to spot early warning signs before they have a bigger impact on your financial future,” she says.
Problems arise when consumers begin treating credit as an extension of their income rather than a financial tool.
“Many young earners fall into the trap of using credit to sustain lifestyles they cannot yet afford. Ultimately, the goal is to shift the mindset from using credit for consumption to using it with intention. Credit should support building a stable financial future, not compromise it. That starts with a critical foundation: protecting your income and your financial base first. Without that safety net, even well-intentioned credit decisions can quickly become financial risks,” says Darko.
Experts argue that South Africa’s protection gap is closely linked to a broader financial education gap.
“Many young people simply haven’t been taught how to think about risk, protection, or long-term financial planning. These are not concepts that are consistently taught in schools, and in many cases, they’re also not modelled at home – not out of neglect, but because previous generations may not have had access to the same knowledge or tools,” says Darko.
Botha says many young people leave school without adequate financial knowledge and leave tertiary institutions carrying debt.
“A lot of young people are coming out of school without financial education, and coming out of varsity with debt. If you don’t know what to do, that pressure can lead you to make bad financial decisions. But if you know what the consequences of your decisions will be, then you’ll be able to operate with clarity and confidence – taking care of your present, building towards your future, and protecting yourself against the things you can’t see coming,” she says.
According to Sanlam’s 2025 Financial Confidence Index, 45% of young South Africans already receive financial planning support through a bank or financial adviser.
While online financial content and social media influencers have increased access to information, experts say personalised advice remains critical.
A financial adviser can help individuals understand their financial needs, identify appropriate products, and create realistic plans based on their income and goals.“The opportunity now is to make financial protection just as aspirational as lifestyle spending. It’s not a grudge purchase; it’s a smart, empowering choice,” says Darko.
* Botha is the communications manager at Sanlam Risk & Savings.
PERSONAL FINANCE