By Katlego Mei, CFP ®

In the world of personal finance, the old adage “make hay while the sun shines” holds profound wisdom. My dad used to say this to me all the time. He encouraged me to make the best use of time, especially as a young adult. When you’re building towards financial freedom, time is your best friend.

The phrase refers to harvesting and drying hay during good weather. Metaphorically, it encourages us to capitalise on positive situations before they pass. This principle can be applied in various ways to improve our financial well-being.

One of the most direct applications of this is in relation to income. When opportunities for earning arise, it’s crucial to take advantage of them. This could mean:

• Taking on extra shifts or overtime when available
• Pursuing side hustles

Generating more income doesn’t mean you should spend it all. Be careful of changing your lifestyle because you are earning a higher income. Lifestyle creep occurs when increased income leads to higher spending on non-essential items, leaving little room for savings or investments. It is a real threat to creating wealth. This is not to say you should never improve your lifestyle; taking a well-planned and thoughtful approach is always better. Here are some tips to avoid the trap:

Prioritise Savings: Automate transfers to savings or investment accounts as soon as you receive your paycheck. Following the 50-30-20 rule (50% for needs, 30% for wants, and 20% for savings) can help maintain a balanced budget.

Evaluate Spending Habits: Review your expenses regularly to identify unnecessary purchases. Ask yourself if each transaction aligns with your long-term goals and values.

Delay Gratification: Put a “cooling-off period” in place of at least seven days for big-ticket items before making a purchase. This helps curb impulsive spending.

The key is to maintain a gap between your earnings and expenditures. The wider this gap, the more you can allocate toward wealth-building activities such as investing or paying off debt.

By saving more of your income early in life, we create a buffer for potential future financial challenges. This strategy provides peace of mind and financial security, allowing you to weather unexpected storms (the rainy days).

Investing in Personal Development

The concept can also be applied to personal and professional growth. When skill development or education opportunities arise, it’s important to seize them. My parents’ best gift to me is my education. Investing in personal development can lead to increased earning potential and job security in the future.

Balancing Opportunism with Long-term Planning

While the “make hay” principle encourages seizing opportunities, balancing this with long-term financial planning is essential. This means:

• Setting clear financial goals and priorities
• Maintaining a diversified investment portfolio
• Regularly reviewing and adjusting financial strategies

By combining opportunistic actions with strategic planning, we can create a robust financial foundation that withstands both sunny and rainy days.

The wisdom of “make hay while the sun shines” reminds us to be proactive and opportunistic in our lives. However, it’s crucial to remember that this approach should complement, not replace, consistent financial habits and long-term planning. Building a secure financial future is not about how much you earn but how much you save and grow through disciplined habits and smart decisions.

So, keep your eyes open for those sunny days, and when they come, make sure you’re ready to make hay.