How to manage money at every life stage: tips from experts

Financial planning is a lifelong journey that shifts in focus with each stage of life, from childhood and schooling to early adulthood, midlife responsibilities, and then, retirement. 

Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money, says it’s vital to distinguish between saving and investing. “Saving is money that you plan on spending in the short to medium term,” she says, typically between three and five years. These savings might go toward a child’s birthday, a December holiday, or a home deposit. 

Investing, by contrast, is for goals that extend beyond five years and should aim to outpace inflation. Parry strongly recommends building an emergency fund before moving into investing. “Think of your emergency fund as a financial cushion or shock absorber between yourself and your bank account,” she says.

Start with R5,000 to cover small emergencies, then aim for a reserve that covers at least three months of household expenses, says Parry. Once this buffer is in place, longer-term investing can begin, she adds.

Tando Ngibe, senior manager at Budget Insurance, notes that savings should offer returns above inflation, be spread across different instruments, and be carefully checked for fees. 

Kananelo Matela, junior investment consultant at 10X Investments, says that an emergency fund can be a priority ahead of retirement savings. “It’s okay to get that in place before taking on financial responsibilities for others,” he says.

Financial lessons start early

Education is a significant financial commitment, and it begins long before the first school bell rings. “With the right planning and the right school, you can give your child a strong educational foundation,” says Natasha Vellieux, finance manager at SPARK Schools.

Stian de Witt, Executive Head of Financial Planning at NMG Benefits, suggests getting children involved in financial conversations early using a “three piggy bank” system:

• Red (Save): for emergencies or special purchases
• Green (Spend): for everyday items
• Orange (Give): for helping others

“This system helps children understand the basics of financial discipline, generosity, and delayed gratification — skills that are invaluable in the long term,” says De Witt.

De Witt also recommends that parents create a school-specific savings plan that includes fees, uniforms, aftercare, transport, and stationery. “Putting even a small amount of money into a high-interest savings account each month will help when payments are due,” he says.

Parents should look for schools that offer clear fee structures, monthly payment options, and early settlement discounts, says De Witt. When it comes to school supplies, parents can save by shopping second-hand or on online marketplaces, he adds.

But affordability shouldn’t be the only factor. “A low-fee school may seem cheaper upfront, but you can’t put a price on the quality of the education your children receive,” says Vellieux.

Managing money at university

University can be a student’s first encounter with managing their own money. For many, a bursary stipend or family allowance is their first steady source of income and is often spent quickly, says Nicky Edwards, Reskill lead at Taking Care of Business.

Edwards notes that because money is still rarely discussed at home, students often lack the skills to manage it wisely. She suggests they track spending weekly, not monthly, and use a simple notebook to record every transaction. This helps distinguish between wants and needs.

Planning ahead for big-ticket items like holiday gifts or licence renewals can also ease the burden. “Say it costs R550 to renew your vehicle license; setting aside R46 each month for this is much easier than finding funds for the entire amount at one time,” Edwards explains.

She also advises building an emergency fund — even saving R100 a month makes a difference. Students should follow a 50/30/20 rule:

• 50% on needs
• 30% on wants
• 20% on savings or debt repayment

Stretch limited income further by using student discounts, buying second-hand textbooks, and selling items no longer needed, while also investing when possible, says Edwards.

Sandwiched in the middle

Midlife brings its own financial pressures, particularly for the “sandwich generation” who are supporting both children and aging parents while planning for their own retirement.

Matela recommends being transparent with parents about their financial needs and resources, ideally involving siblings where possible. “If they don’t have a formal budget, you may want to help them build one. It’s not about control; it’s about laying the cards on the table,” he says.

Healthcare is a major consideration, with potential gaps in cover or costly frail care. A lapse in medical aid can mean higher premiums or limited access to benefits, while frail care can cost upwards of R40,000 a month. “If your parents’ income falls short, it might be time to look at their assets,” says Matela, such as downsizing property or restructuring savings.

Planning for retirement in a changing world

Edward Wall, portfolio specialist at Morningstar South Africa, notes that people are living much longer than before. “People used to work until their death or until they reached old age… The reality, however, is a lot more complex than this, with not all people following the same retirement journey,” he explains.

While retirement age is often set at 60 to 65 by employers, extending working years is becoming more common. The critical question, says Wall, is at what age is retirement sustainable.

Matela recommends laying a strong financial foundation between 25 and 44, increasing retirement contributions, and eliminating short-term debt between 45 and 60, and considering estate planning. “A diversified portfolio still makes sense, but you may want to start de-risking gradually,” he says.

PERSONAL FINANCE