Nov 27, 2019  | Tags: financial goals, personal finance

Our Insights

Your early adult years are a financially critical time period of your life. The foundation you set in your twenties and thirties will impact your ability to earn, save and reach your wealth goals later in life.

In this post, we’ve put together ten priority financial actions you should take throughout your young adulthood. Successfully checking these steps off the list will move you closer to financial freedom.

1. Establish good financial habits.

If you’re just barely in your 20s, you should start learning the basics of smart money management. Set up a budget and learn how to track your spending and balance your bank accounts. Select financial goals that you’d like to meet at future points in your life and map out a plan to reach them. Create a plan for reducing (instead of accumulating) debt, too. 

Becoming financially-savvy is an important step in generating and preserving your wealth and it’s not one you should put off. You can learn how to manage money wisely long before you have a well-paying career.

2. Focus on your education.

It’s easiest to focus on your education before you start a family and become burdened with the expense of caring for others. Make your education a priority since it’s a key way to invest in your financial future.

3. Build your career.

Along with your education, invest in on the job training as you gain experience in the workforce. Work with your employer or a trusted mentor on a career pathway, working on moving up and establishing steady income growth.

4. Prioritise paying off debt.

You may have racked up a good deal of debt for your university education or due to unwise spending. Try to eliminate this debt as soon as possible while you still have energy, good earning capacity and many working years ahead of you.

You should also strive to avoid more debt by making contributions to an emergency savings account that can get you through months of unplanned unemployment.

5. Explore your investment and superannuation options.

As soon as you get established in your career it’s time to think about your investment and retirement strategy (believe it or not). Work with a trusted advisor and explore investment and long-term savings options that will kick start wealth growth. Even if you are still making repayments on your debt, you should still try to carve out a place in your budget for superannuation contributions and investments, even if they’re small initially.

6. Prepare financially for a relationship.

By your late twenties or thirties, you may be seriously considering getting into a committed relationship like marriage. It’s important to remember that a serious relationship will impact your finances and that your finances will impact your relationship.

Uncomfortable though it may be, you absolutely must have honest discussions about money with your partner-to-be before making a legal commitment to each other. You will minimise arguments and trouble down the road if you both have a clear understanding of each other’s view towards money, and can hopefully align on future goals.

7. Buy your first home.

This is a landmark financial goal that you may choose to work towards while you’re still single or later in life with your spouse. Buying a home is an important way to set up further options for wealth generation down the track. It is important to talk to an expert adviser here, who can help you find a property with the most potential for equity growth, while being aligned with your lifestyle goals.

8. Buy an investment property.

Property is still one of the most reliable ways to invest in Australia. After purchasing your primary home, you should look to property investment as soon as you are in a financial position to do so.

9. Start your estate planning.

You may find yourself married with children by your late thirties. At this point, it’s already time to start thinking about how you’ll provide for your partner and kids in the event something happens to you.

What will happen to all the funds you’ve worked hard to save over the years? Who will benefit from your income stream and investments and assets? Who will look after the kids? Estate planning isn’t something you put off until you’re elderly and on your deathbed, it’s actually something you need to do as soon as possible.  

10. Get advice from a financial planner.

Your twenties and thirties are the perfect time to partner up with a professional financial adviser. Seeking expert help early in life could be the best investment you make, helping you set the right foundations and achieve all of your wealth goals.

As you get older, you have more financial complexities, and the ramifications of money mistakes, to manage. The sooner you can get the help of an expert, the better!

Calder Wealth Management will put you on the pathway to achieve your financial goals.

Talk to the team at Calder Wealth Management. Call us on (08) 8373 3333 to schedule your free initial appointment. 

Written by Ben Calder at Calder Wealth Management.