7 Money Rules Every Young South African Should Know

Managing money effectively from a young age can set the foundation for long-term financial security. At Corona Financial Services, we believe in equipping our clients especially those just starting their financial journey with the tools and principles that make a real difference.

Here are seven proven money rules every South African should aim to understand and apply:

1. The 50/30/20 Rule: Build a Balanced Budget

One of the easiest budgeting methods to start with is the 50/30/20 rule:

• 50% of your income should go to needs - housing, transport, food.

• 30% can be used for wants – holidays, dining out, tech.

• 20% should go towards financial goals – savings, investments, and paying off debt.

This approach ensures you're covering essentials, enjoying life, and building toward your future all in balance.

2. The 4% Rule: Retirement Planning Starts Now

Even if retirement feels far away, the 4% rule gives you a practical benchmark. It says you can safely withdraw 4% of your retirement savings annually without running out of money.

For example, if you’ve saved R1 million, that equates to R40,000 per year, or about R3,333 per month. This rule helps you reverse-engineer how much you’ll need for the lifestyle you want later in life.

3. The Emergency Fund Rule: 3 to 6 Months of Expenses

Life is unpredictable. A proper emergency fund gives you financial breathing space. Aim to save 3 to 6 months’ worth of essential living expenses in a separate account only to be used for real emergencies like a medical bill or urgent home repair.

This simple rule can save you from high-interest debt in tough times.

4. The 2x Investing Rule: Match Luxury With Long-Term Growth

This rule encourages mindful spending: for every rand you spend on a non-essential item, invest the same amount.

If you’re spending R1,000 on concert tickets or fashion, also invest R1,000 into your portfolio. It’s a way to enjoy life without sacrificing your long-term financial goals.

5. The 3x Rent Rule: Keep Housing Affordable

Housing shouldn’t cost more than one-third of your gross monthly income. If you earn R30,000 before tax, your rent shouldn’t exceed R10,000. This keeps your budget flexible and prevents overspending on accommodation.

6. The 20/4/10 Rule: Car Financing

Cars are often the first big-ticket item for young earners and one of the fastest-depreciating. If you need a car loan:

• Put down at least 20% upfront,

• Repay it in no more than 4 years, and

• Ensure monthly repayments stay under 10% of your gross income.

This protects your cash flow and prevents long-term financial drag.

7. The Rule of 72: Understand How Your Money Grows

Want to know how long it’ll take for your investment to double? Just divide 72 by your investment’s annual return. For example, with a 10% return, your money will double in just over 7 years. It’s a simple way to grasp the power of compounding and plan your long-term wealth growth.

Final Thoughts

These seven rules are not just theories. They are actionable steps that build strong financial habits. Whether you’re a student, young professional, or already earning, starting early gives your money the time it needs to work for you.

If you’re ready to take the next step or want tailored advice, contact one of our advisors at Corona Financial Services. Let’s build a future that works for you.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. For personalised investment advice tailored to your specific financial situation, please contact us or one of our qualified financial advisers at Corona Financial Services.