Financial planner says once you have been promoted and your income increases, this will allow you to refine your financial plan and secure long-term stability.
Starting your financial independence journey as an intern can feel overwhelming, especially when your income is limited.
Starting early to develop good financial habits sets you up for success as your career progresses.
“Whether you’re just beginning or adjusting to a new promotion, careful financial planning is crucial for long-term stability,” says Tebogo Kereng, trainee financial planner at BDO Wealth.
Financial planning as an intern
1. Track your expenses
Kereng says it is important to know exactly where every single rand is going because this can help you identify where you might be overspending and where you can cut.
“You can use apps, a spreadsheet, or even your bank statements to monitor spending. Differentiate between your needs (rent and groceries) and wants (entertainment), and cut back on non-essentials.”
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2. Reduce utility costs
Another thing he advises interns to do is to reduce utility bills, especially electricity. “Eskom offers a Free Basic Electricity (FBE) program for low-income households, providing a limited amount of free electricity.
Check with your municipality to see if you qualify, and take other small steps like switching off lights or using energy-efficient devices to reduce costs.”
3. Avoid unnecessary debt
Kereng adds that it is very tempting to take on debt for items like cell phones or clothing, he advises interns not to take out any unnecessary debt if it stretches out their budget.
“Always evaluate whether you can truly afford something based on your current financial situation, if your essentials and savings goals are covered, you may be able to afford a non-essential item.”
4. Start an emergency fund
He emphasises the importance of putting aside as much as you can each month. The aim of putting money away is to have an emergency fund that covers up to two to six months’ worth of expenses.
“This will help protect you against unexpected financial hardships. By starting with these basics as an intern, you lay a strong foundation for future financial security.”
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Marichén Erasmus, financial planner at BDO Wealth says a promotion and an income increase will allow you to refine your financial plan and secure long-term stability.
1. Adjust your budget
She says when your salary increases, revisit your budget.
“It’s easy to fall into the trap of lifestyle inflation, where you spend more because you earn more. Instead, keep lifestyle expenses in check and allocate the extra income toward savings, debt repayment, or investments.”
2. Increase your emergency fund
Erasmus adds that as expenses grow, so should the emergency fund.
“Ideally, you should have enough saved to cover at least three months of living expenses. If your current fund is below this amount, now is the time to top it up.”
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3. Pay off debt
“A promotion gives you the financial breathing room to tackle any outstanding debts. Paying off high-interest debt like credit cards or personal loans should be a priority, freeing up future income for saving and investing.”
4. Re-evaluate your investments and goals
She adds that it is important for one to consider boosting their discretionary investments once the salary increases.
“Whether it’s saving for a child’s education, planning a big trip, or investing in your retirement, promotions provide an opportunity to accelerate progress toward your financial goals.”
5. Check your tax obligations
Erasmus adds that a higher salary might push you into a new bracket. One way to offset this is by increasing your retirement contributions, which can help lower your taxable income.
“Additionally, ensure that your risk cover and retirement contributions automatically adjust with your salary if they are part of your benefits package.”
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