From starting out as a young adult to hanging up your work boots in retirement, we offer valuable tips to get the most from your money at every stage.
20-somethings – develop habits that can last a lifetime
The money habits we form in our 20s can stay with us for a lifetime so it’s worth taking control of your cash even at this early stage. Learning to live within a budget and aiming to deposit at least part of each pay packet into a dedicated
savings account will stand you in good stead, helping to grow funds for emergency bills or to achieve personal goals like an overseas trip or first home.
Applying for a personal loan or credit card can improve your credit record, but only take out what you can comfortably afford to repay. Avoid weighing yourself down with debt at this early stage.
Our 30s – settling down
We often wait until our 30s to get married, buy a home and start a family. Switching from a single lifestyle to being part of a couple brings new financial challenges. Research by ME Bank shows couples often find it hard to discuss money matters but the more you talk about money, the less tension and conflict it causes. By having money conversations from an early stage, you have a better chance of achieving shared goals in the future.
Living with a home loan can take a bit of getting used to but it gets easier over time as your income rises and the loan steadily whittles away. Aiming to pay a little extra off your loan each month means valuable savings on long term interest costs and a valuable provide to home equity.
Once kids come on board, aim to save for their education from an early stage. The preschool years sail past and it won’t be long before you’re waving goodbye to your child on their first day of school – and saying ‘hello’ to a raft of education expenses.
The big ‘4 0’ – time to shore up your finances
Our 40s tend to be some of our peak income earning years however the basics followed in your 20s – saving on a regular basis and keeping a lid on debt, are still very relevant in our 40s. Resisting the urge to increase spending with each pay rise is a smart way to shore up your finances.
By this stage you have probably built up valuable equity in your home, which can be used to fund family goals like a new car or family holiday. Go easy on home equity though – depleting this asset at an early stage can narrow your options for the future.
Our 50s – the golden years
Our 50s can offer tremendous personal freedom. Your children may have left home and those early efforts to pay down the home loan sooner are paying off. Time to relax and enjoy the good life!
It makes good financial sense to enter retirement with as little debt as possible, so regularly review your debts, and develop an action plan to clear the slate – and remain debt-free.
Check your progress saving towards retirement also. Living too large can mean you’ll come up short later on, and that makes your 50s an important period to work towards retirement goals.
60s and beyond
You’ve worked hard throughout your career and now is the time to reap the rewards. Once you’ve hung up your work boots, it is especially important to get the most from your money - and it’s not just about healthy investment returns. Look for everyday banking products like a regular transaction account or credit card that won’t weigh you down with excessive fees and unwanted charges.
And when you’re spending time with the grandkids, take a moment to pass on the healthy money habits you’ve learned to keep the ball rolling across the next generation.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.