Retrospect is a funny thing – especially when we wonder what we could have done better throughout the decades. We break it down with our top tips for managing money through your 20s, 30s and 40s. From avoiding credit cards in your 20s, paying down your mortgage in your 30s and salary sacrificing in your 40s – it’s no-nonsense advice from someone who lives and breathes financial planning.
In your 20s
It’s hard in your 20s to think about financial commitments. It’s all about having fun and going out right? Of course – but it’s also a good time to save and organise your finances, especially if you’re living at home and have a good income. Once you’ve got your first full time job and can get your finances right early – it’ll make life so much easier later on.
So here are our tips to get you started:
• Have a chat to your employer about splitting your income. That way as soon as you’re paid you won’t be able to use it.
• If that’s not an option, think about setting aside half your income where possible.
• A great habit early on is to get a debit card – not a credit card. Any money you spend is yours, not the banks, meaning no nasty interest.
In your 30s
It’s usually about prioritising your needs and finances in this decade, taking into account potential kids, home loans and other financial obligations. These elements have to be weighed up with things you want for the future. It’s a tricky time to save, but our best tip during your 30s is to work out a clear budget each year.
Here are our top 3 tips:
• Track what you’ve spent and what you expect to spend to maximise every cent.
• Concentrate on paying down your mortgage.
• Set aside time at the end of each month with your partner to plan the month ahead. This means you won’t spend your spare cash on events that are not planned.
In your 40s
As your income rises, this is a great time to take advantage by investing wisely. The biggest trend we see in this age group is that if you aren’t managing your finances, you’ll always live to your means – or exceed them.
We find it’s actually quite rare for people to live well below their means and save extra money.
Here are our tips for managing money in the 40s:
• Any increase beyond CPI should be put away for the future.
• You may want to start thinking about savings for retirement and getting the tax benefits along the way. Salary sacrificing into super will also help you to prepare for retirement.
• Concentrate on paying down your mortgage – make an extra payment every month.
So there you go – a couple of quick tips to help you get ahead, no matter what decade you’re in now!
