Your money priorities will change throughout your life. In your 20s, you might be building good habits and saving for your first home. By your 40s, you could be juggling a mortgage, kids and investments. And as retirement gets closer, the focus may shift towards super, flexibility and turning your savings into income.
There’s no perfect timeline, though. Your circumstances, goals and choices matter more than your age.
Here are some money moves to consider in every decade, and the common mistakes to avoid along the way.
Your 20s: Build good habits early
Your 20s are a great time to build the foundations for your financial future. You might not earn a huge salary yet, but the habits you develop now can make a real difference over time.
Start by understanding where your money goes, setting up a budget that works for you and building an emergency fund. If you’re working, check your super and make sure your details and investment options are appropriate for your circumstances.
Thinking about buying your first home? The First Home Super Saver Scheme may help eligible first-home buyers save for a deposit through voluntary super contributions.
The trap to avoid: Lifestyle creep. It’s easy for your spending to increase every time your pay goes up.
Tip: When you get a pay rise, consider directing some of the extra money towards savings, super or investments before you get used to spending it.
Your 30s: Get your finances working as a team
Your 30s can bring big changes, including buying a home, starting a family, changing careers or combining finances with a partner.
This is a good time to look at your finances as a whole. Think about your mortgage, other debts, insurance, super and investments, rather than treating each decision separately.
If you have a partner, talk openly about your goals, spending habits and responsibilities. You don’t necessarily need joint bank accounts, but you do need a shared understanding of how you’re managing money together.
Think carefully about borrowing, too. A mortgage that works for your current income might feel very different if one of you takes parental leave, changes jobs or reduces working hours.
The trap to avoid: Borrowing based only on what you can afford today, without considering how your life and income might change.
Tip: Stress-test your budget against a few scenarios, such as one income temporarily dropping, higher expenses or interest rates changing. Make sure your debt still feels manageable.
Your 40s: Build a proper financial plan
By your 40s, you may have more income and assets, but you could also have plenty of competing priorities. Mortgage repayments, family expenses, school fees and investing can all put pressure on your cash flow.
This is a useful time to step back and work out what you’re building towards. Are you aiming to pay off your home, grow an investment portfolio, help your kids, retire early or have more flexibility at work?
Your plan might include reviewing your mortgage, increasing investments or exploring strategies such as debt recycling. These strategies have risks and costs, so understand how they work before deciding whether they’re appropriate for you.
You might also be considering upgrading your family home or buying an investment property. Make sure the decision fits your broader financial plan, rather than relying on the assumption that property prices will always rise.
The trap to avoid: Making big financial decisions because everyone else seems to be doing them. A self-managed super fund (SMSF), an investment property or a larger home isn’t automatically the right move.
Tip: Write down your financial goals for the next five, 10 and 20 years. Then work backwards to identify what needs to happen to get there.
Your 50s: Prepare for retirement without panicking
Your 50s can be a turning point. Retirement may start to feel real, and you might be wondering whether you have enough super or whether you can afford to stop working when you want to.
Start by checking your super balance, contributions, investment options and expected retirement income. Consider how much you’ll need to cover your living costs, including housing, healthcare, travel and other plans.
Super can be an important part of your retirement strategy, but it isn’t the only one. Investments outside super, cash savings and your home may also play a role, depending on your circumstances and goals.
This is also a good time to protect your flexibility. You may want to reduce your working hours, change careers or help adult children financially. A plan that leaves you with no breathing room may not suit the life you want.
The trap to avoid: Panicking because you think you’re behind, or taking on more investment risk in an attempt to catch up quickly.
Tip: Build a realistic retirement projection and review it regularly. If there’s a gap, look at the options available to you, such as saving more, adjusting your retirement date or changing your expected spending.
Your 60s: Turn your wealth into retirement income
Retirement planning changes when you move from building wealth to using it. You may have super, investments, savings and a home, but the question becomes how to make those assets support the life you want.
Understand your options for accessing super, including the rules around preservation age and retirement conditions. Depending on your circumstances, you may be able to move eligible super into retirement phase and receive an income stream.
Think about the order in which you’ll draw on your assets, how much income you’ll need and how your investments should be structured. You don’t necessarily need to sell everything or make big changes the moment you retire.
It’s also worth testing your retirement plans before making permanent decisions. If you’re thinking about moving, downsizing or travelling for an extended period, try a smaller version first where possible.
The trap to avoid: Assuming retirement will automatically cost less, or making a major lifestyle change before you understand the financial and personal impact.
Tip: Create a retirement budget based on the life you actually want, not just your current spending. Include the bigger expenses that might not happen every year, such as travel, home maintenance and replacing a car.
Your 70s: Simplify and plan for what comes next
By your 70s, your priorities may shift again. You might be less focused on growing your wealth and more interested in making your money easier to manage, paying for support and deciding what you’d like to leave behind.
Review your investments and financial structures. If your arrangements have become complicated, consider whether they still serve a purpose or whether simpler options could make things easier for you and your family.
It’s also worth discussing your wishes with the people who may need to help you in the future. Estate planning, wills, powers of attorney and plans for managing your finances if you become unable to do so yourself can all be important.
You may want to help family members while you’re alive, too. If so, understand how gifts could affect your own financial security and any entitlements you receive.
The trap to avoid: Leaving important decisions until someone else has to make them for you.
Tip: Review your estate planning and financial arrangements regularly, and make sure someone you trust knows where to find the important information if needed.
The best financial plan changes with you
These decades aren’t a checklist, and there’s no rule saying you need to own a home by 30, have a certain super balance by 50 or retire at 60.
Your priorities will depend on your income, family, health, goals and the opportunities available to you. You might be ahead in one area and catching up in another. That’s normal.
The important thing is to understand where you are now, decide what matters most and make financial decisions that support the life you want.
Start here: Ask yourself what you want your money to help you do over the next five years. Then choose one practical step you can take this month to move closer to that goal.
Want to learn more?
Listen to Owen Rask and Gemma Mitchell discuss the money moves to consider in every decade, from your 20s through to your 70s, on The Australian Finance Podcast.
Need help with your financial plan? Explore Rask Advice to discuss your goals and options.
This article contains general financial information only and does not take into account your objectives, financial situation or needs. Consider your own circumstances and seek personal advice before acting on anything discussed.
