The first question you're probably going to ask, after you've decided to start investing, is "How much?"

The answer is different for everyone but we think that for most young professionals you can keep things simple and avoid getting stressed or anxious about it. There are some great tools you can use to track your spending and categorise your expenses for you but our advice is to not let budgeting become a burden and a source of stress.

You shouldn't be living your life wracked with guilt that you haven't been able to stick to your budget and you definitely should be trying to follow a budget that isn't practical.

The 50 / 30 / 20 rule

We like the 50 / 30 / 20 rule that was made popular by U.S. Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan.

Take your after-tax income and split it into 3 buckets of 50%, 30% and 20%. Then allocate each bucket for different things.

20% for saving and investing

We like to handle the smallest bucket first, the 20%. That's one fifth of your after tax income. That's the money you set aside for long term investments and saving. That's the money we're going to help you allocate so you get great long term returns.

This is often called "pay yourself first". Take the money you're investing and pay it into the future-you account before you do anything else.

The first thing you should do with this money is pay off any unhealthy debt and build up your emergency savings, then start putting this into a tax free savings account until you max out your annual limit. If you've still got some money to save after that you can start putting it into other tax-efficient vehicles like a pension or retirement annuity.


This is not for short-term savings goals like holidays or cars, this is money you are putting away for a few decades.

Short-terms savings come from your other two buckets as we explain below.

It's tempting to think you'll be better off saving more when you're earning more but the maths says otherwise. How much you invest is important, but time is still the most critical factor when you consider the power of compound growth.

Don't sell your future self short, invest your 20% today.

50% for essentials

The biggest bucket, half of your after-tax income, is for your essentials. You need shelter, food, transport, insurance, health care, clothes.

Imagine you are a miserable miserly person that spend the absolute minimum on everything. Now draw up a budget to live with that mindset on half-your after-tax income. Then skip to the next step so you can stop being sad.

30% for guilt-free spending

Don't be miserable. The 50% bucket helped you establish a baseline cost for your lifestyle if you never treated yourself to a good meal, a holiday, or a nice pair of shoes.

Layer the remaining 30% on top of your essential spending in a way that is personal to you. Maybe you'd rather pay a low rent and eat out more, or you'd prefer to forfeit all those streaming subscriptions to have more money for new clothes or tickets to live sport.

Saving for a goal

If you want to save for a goal like a holiday or a car, think about whether it's an essential or a nice-to-have and allocate budget toward saving for that goal. It could be both.

For example, if you're saving for a new car, come up with a budget for the cheapest most practical car you can get away with, and deduct that from your essentials budget (travel is an essential). But if you're the kind of person that wants to spend a little extra for something with some street-cred then consider also deducting a little from your guilt-free indulgence budget.

An interesting side effect of this is that often, after saving toward a goal for a few months, you'll re-asses that goal and might be happy to just get the cheap practical car and enjoy that guilt free spending on something else. The most important outcome is not taking on unhealthy debt!

Using a credit card

A handy way to stick to this budget is to use a credit card for your discretionary spending (your guilt free 30%). Make sure your credit limit isn't bigger than the budget and make sure you pay it off every month. This has the added benefit of helping to improve your credit score over time.


If you need some help tracking your spending you can use one of these handy budgeting tools:


The OG of budgeting apps in South Africa, 22seven can be a bit clunky but it has years of data and has become pretty good at auto-classifying your transactions. The app is owned by Old Mutual so be wary that they are definitely using your data to figure out how to sell you their products.


The new kid on the block is FinWise. It has a nice clean interface but you'll need the paid version to synchronise your data with your bank(s) and broker(s) automatically.


You can be happy and get wealthy at the same time. Pay your future self first (20% of your after tax income) but follow the Fynbos method and avoid wasting your savings on fees and taxes.

Use 50% of your after-tax income as a budget for your essentials, then spend what's left to upgrade your lifestyle and enjoy yourself.