President Cyril Ramaphosa used the example of a child called Tintswalo to illustrate how far our democracy has come in 30 years in his State of the Nation Address. He even mentioned that when she grew up, she started earning an income and could save and live a better life.

That is our hope for all South Africans, but the reality is that there are many challenges. Many of us know we should start saving part of our income to live a better life, but where does one start, and how do you know how much to save, and for what? How can we avoid the scary debt levels government has gotten itself into?

What makes this difficult to answer, is that each of us has our own goals and dreams and idea of success. For instance, if we were to follow the president’s example of a persona, let’s consider these three people:

Dheshni is a 30-year-old single mother. Her biggest concern is to make sure she saves enough for her son’s education while she manages her lifestyle without compromising on the good things in life. For instance, she received quite a nice car from her father when she started out in life and wouldn’t like to downgrade when she must replace it. Her friends don’t have cheap taste, and though things like ethics and contentment are values that resonate with her more than material goods, it’s great to spend time with friends over a nice glass of wine and restaurant dinner.

Kagiso is a 44-year-old husband and father of three. Him and his wife saw life as a party when they started out, and still love a good party. But they have learnt responsibilities, can at least give their children a good education and are not want for much. What worries them are their extended families and the needs they will have. They would hate living the good life while their parents struggle, or an unfortunate sibling.

Michelle is a 52-year-old singleton who loves to travel. Her father was a bit of a miser and from him she learnt to save diligently. She can’t always afford the fancy trips some of her friends suggest but tries to save up before she gets onto an aeroplane. She doesn’t want to make her sister dependent on her but wants to support her in putting her daughters through university. She pretends it’s a loan but won’t let them pay back the money.

Each of them wants to live a good life and make sure those close to them do, too. We could say Michelle followed the thumb-suck rule of saving 18% of her gross income (before tax) for retirement when she started working. So did Dheshni, but then her son was born, and she had to cut back on her retirement annuity. Kagiso and his wife only woke up to retirement savings at 30, which means they will have to save a lot more per month if they want to be in the same spot as if they had started 10 years earlier. The magic of compound interest, earning interest not only on what you invest, but also on the growth you earn on your investment, is the magic wand that makes your money grow exponentially.

Our actuaries have calculated* if Dheshni continues as is, she will be in trouble. If she saves only 9% of her salary of R32 000 per month (she started at R15 000), she will run out of retirement money by age 77. If she ups that to 18%, she will be fine. Regarding replacing her car, if she saves for it upfront, her monthly out-of-pocket amount will be 40% lower. Her son’s schooling is sorted, but by saving R1 000 a month in a linked investment or an endowment for his university studies now, only 3% of her income, she’ll avoid the 14% of her income it will cost her to pay for the R500 000 his degree will cost.

Kagiso earns R60 000 a month now (he started at R11 000), but because he only started saving for retirement at 30, he must now save 31% of his salary to ensure a comfortable retirement. The 15% he started with will only last until he turns 74 if he retires at 65. Kagiso and his wife chose a name for their family savings: The Addams Family Emergency Kitty. If they invest R50 000 once-off into a linked investment, their family can withdraw R4 400 per year without reducing the initial investment. If his family can wait 20 years before they need to withdraw, his savings will grow to R185 000.

And Michelle, how much does she need to put away for her nieces on top of her retirement discipline? Even if she turns far beyond 90, her retirement money will last. The diligent savings from her starting salary of R3 000 until her current one of R50 000 will pay off. Her nieces are 13 and by saving now in a linked investment or an endowment for five years, it will cost her R6 000 per month to have enough, instead of R14 000 if she pays it monthly during their studies.

Each of us differs. Because we are so scared of making mistakes with our money, choosing how to invest, and how much, may seem intimidating. That is why using a financial adviser to navigate the maze of options is a great idea. They can calculate how much our needs will cost us, what influence inflation will have on our savings efforts, and what we must sacrifice now to reach our dreams tomorrow.

*For each of our personas the actuaries assume they started working at 22; inflation of 6%; education inflation of 8% (current cost of university at R55 900 per year); salary growth of 8%; retirement annuity growth of 12%; other savings growth of 9%; and that they will replace 75% of their income when they retire at age 65.