Enrico Louw, General Practice Principal at Old Mutual Personal Finance
Most people associate financial planning with retirement that financial planning is about retirement. In reality, financial success is often shaped much earlier, through the small decisions people make, or don’t make, during key life stages such as starting a career, buying a car, getting married, purchasing property and raising children.
Enrico Louw, General Practice Principal at Old Mutual Personal Finance, says that many South Africans only prioritise financial planning after experiencing a financial crisis or as they approach retirement.
He warns that people should avoid being reactive with their finances, where they only begin taking financial planning seriously after a crisis or setback. Instead, they should take a proactive approach and understand the key stages of life that have the greatest impact on long-term financial security.
The first major financial life stage, he says, begins when young adults enter the workforce for the first time.
“While earning a salary creates excitement and independence, it is also the period where spending habits and attitudes towards money are formed. This is where people are adjusting from not earning anything to suddenly having disposable income every month,” he explains.
According to him, many young professionals fall into the trap of overspending, accumulating unnecessary debt and delaying savings because retirement and long-term financial planning feel distant. “The cost of delaying savings and retirement planning is significant because you lose the benefit of time and compound growth,” he says, adding that “many people only realise later in life how important it would have been to start saving earlier”.
As people move into their late twenties and thirties, financial pressures often intensify.
This is the stage where many people get married, buy homes, finance vehicles and begin raising children, often simultaneously. These milestones introduce major financial responsibilities, including bond repayments, school fees, childcare costs and general household expenses.
But Louw cautions that many people underestimate the value of professional financial advice during this period. He warns that many households commit too much of their income towards property or lifestyle expenses without properly considering long-term affordability.
“For example, you don’t want the bulk of your income going towards a bond while struggling to afford transport, school fees or other basic living expenses. Therefore, the importance of partnering with a financial planner becomes critical because every individual’s circumstances are unique,” he says.
By their forties, many people enter their peak earning years. At this stage, the focus often shifts from establishing financial stability to growing wealth and investments. This is usually the period where retirement savings, pension funds and investment portfolios begin accumulating more meaningfully. Career growth and upward mobility also become increasingly important as individuals aim to maximise earning potential during these years.
However, Louw notes that people who delayed saving earlier in life often begin to feel the consequences during this stage. “It is at this point where a lot of people only become serious about money, and it is often after they have already made financial mistakes”.
The final major life stage is the transition into retirement, a shift that requires both financial and psychological preparation, because the transition from earning an income to drawing an income from your accumulated savings requires intentional planning, he says.
Louw stresses that starting to save early remains one of the most powerful advantages in financial planning because of the compounding effect of long-term investing.
“The return you earn on previous returns is something you can only truly benefit from when you start early,” he explains.
Ultimately, he says financial planning is not about perfection, but about making consistent, conscious and informed decisions throughout each stage of life. Ultimately, it comes down to the choice between proactive and reactive financial planning.
“The small decisions we make at key moments often determine whether someone achieves financial success or face financial challenges later in life,” he says.
For this reason, he encourages people to approach every life stage with greater financial awareness, understanding that proactive planning today can create stability and freedom in the future, and that this can be achieved with confidence through a partnership with a qualified financial adviser.
ENDS
