SAVINGS goals must be linked to achievable milestones. Know what you are saving for and commit to it. Freepik
Money lessons learnt late in life can be costly - consider the opportunities to make sound financial decisions that have been missed along the way.

It is likely that how you handle money in your youth will determine your future financial prospects. For example, if you are wasteful in your youth, there’s a higher probability of the same behaviour persisting beyond your 20s.

On the other hand, if young people try to understand the importance of prudent money management, the impact can be long lasting.

Empowering yourself with information can help to chart a better financial future earlier in life.

Whether or not you earn an income, it’s important to learn the basics of money management, such as budgeting and savings.

Here are the top five lessons to master before turning 30:

1.Make your money work for you. Always budget to save. A budget can help you to keep an eye on how much you spend from month to month, but it must also be used to facilitate savings. As you consistently depend on a budget to manage your finances, you get a better handle on your money, which will make it easy to identify wasteful expenditure on non-essentials.

2.Have financial goals and stick to them. Most young people believe having financial goals is something that starts once you have a secure, permanent job and a large set of responsibilities. On the contrary, setting financial goals must begin early on in life and practised throughout.

Whether you are a student or holding down a temporary job, know what you want to achieve with the (little) money you have. This is the time to start practising basic money management skills, such as savings, budgeting and living within your means.

3.Don’t bling with debt. At some stage in your life, you will need credit, particularly for big-ticket items such as a house or a car, and this may require you to approach a lender for financing.

Avoid taking on debt simply to match the lifestyles of friends or colleagues. For example, instead of buying a big fancy vehicle as your first car, opt for a smaller and simpler car. This may leave you some room to save for a deposit towards your house. Simply because a friend or colleague drives the most expensive model of car or wears the latest clothing brands does not mean you must do the same.

Know what you want to achieve with your finances and never let your plans get derailed by other people’s lifestyles.

4.Protect your savings. Savings goals must be linked to achievable milestones. Know what you are saving for and commit to it. For example, if you have set aside savings for emergencies, be sure to use the money only when you have an emergency. This is about remaining disciplined to your savings goals, to ensure you do not deviate from them.

5.Regularly review your financial position. You may have made the right financial decisions in life such as having a good base of savings, manageable debt and controlled spending patterns. However, this does not mean you don’t, from time to time, have to review your finances, because external events such interest rate cuts might impact your savings.

Inculcating good money management skills and behaviour starts with early lessons in financial literacy. A financially literate or capable person is more likely to make better decisions about their money and which financial products and services to use to suit their needs. Therefore, it is important for us to empower ourselves with information, knowledge and skills.

Dhashni Naidoo is a programme manager for FNB Consumer Education.

PERSONAL FINANCE