Basic money principals remain the same irrespective of age, so making smart choices earlier on in life will help to avoid money miseries in the future.

“Having money is a lot like being in a relationship. When things go well, every day seems filled with happiness. When it all goes wrong, life can get pretty unpleasant,” says John Manyike, spokesperson: head of financial education at Old Mutual.

“Remember your relationship with money also affects those around you, in either a good or a bad way. If your money is a source of stress, you may pass that stress on to your loved ones, which is not ideal for anyone of any age. If things get tense when it’s time to open your bank statements; it could mean that you’ve fallen into a bad relationship with your money,” he says.

Manyike suggests the following money mistakes should be avoided by people in their 20s and 30s especially:

1. Not budgeting and disregarding the daily impulse purchases
   It’s so easy to tell yourself, I can afford this, it’s only R50. But have you ever gone through your slips from the previous month and actually added up all these small purchases? If you keep up with this they will start to add up and could take a significant chunk of your budget.
2. Treating savings as a “nice to have” that will happen one day
   Instead view savings as an expense. Put some money away before you spend it or set up a debit order just for savings.
3. Living beyond your means to impress friends and family
   Instead, be practical about what your income allows and avoid taking on new debt and using your overdraft or credit cards.
4. Buying an expensive car just because you qualify for the finance
   A young professional who qualifies for vehicle finance of R10 000, for example, needs to know that he/she would be better off over the long term if she drives a less expensive car for a few years and saves the difference to reap the rewards of compound interest instead.
5. Resigning to access your pension fund to pay off debt
   If you’re tempted to resign to access your retirement fund and use the cash payout to help fund your living costs or pay off your debts, think again. Workers who do this are actually borrowing money from their future. This is a major concern, and one of the reasons why South Africa’s savings rate is poor.  People who cash in their retirement funds instead of reinvesting or preserving the proceeds invariably have to rely on the state or their children when they retire.

As for those in their 40s or 50s, Manyike suggests these money mistakes should be avoided:

1. Not budgeting and not knowing what you can and can’t afford
   When you have a completed budget, it is essential to know exactly what you can afford and what you can’t. A rule of thumb that every South African should implement before purchasing a “want” item is “If you can’t afford it, don’t buy it”. If you have to incur further debt on an item you don’t need, just walk away!

2. Not taking care of your health and that of your family
   Improve your and your family’s health by eating, sleeping and exercising properly. The healthier you are, the lower your medical and pharmacy bills will be.
3. Not knowing how to say “no” to yourself and your family
   Learn to say “sorry, no” to yourself and your family. Make sure everyone in your household understands how important it is to live within their means.
4. Recurring debt
   Avoid using rotating credit on store cards for daily essentials; instead, be smart about collecting coupons and rewards on loyalty cards.
5. Not considering lifestyle financial planning
   The aim of this is to help people build a plan to bridge the gap between where they are now and where they want to be, with as much certainty as possible, which requires an adviser to have a deep understanding of the customer. Speak to an accredited financial adviser!