Smart money moves for every age group

Whether you’re in your 20s, 30s, 40s, 50s or 60s here are some ideas to help you make the most of your money.

Money plays a big role throughout our lives, and some simple strategies can help you make the most of each life stage while setting yourself up financially for the next. Life is filled with milestones, though achieving them can hinge on having the necessary financial resources.

The good news is that it’s never too early, or too late, to use good money management to improve your fiscal wellbeing. Here are three ideas for each age group.


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Your fabulous 20s

Our 20s can bring freedom, independence – and if you play it right, a financial head start for life.

1. Get in the groove of good money habits

Chances are you’re pretty footloose in your 20s. No mortgage, no children, and lots of money to spend on you. That’s exactly why our 20s are a time to lay strong financial foundations. It can be a lot easier to save now rather than later on.

Get started by drawing up a budget, and aim to stick to it. Put your savings on autopilot by setting up a direct debit that automatically transfers 10% (maybe more) of each pay into a savings account. If possible, save each pay rise.

Importantly, steer clear of easy spending options such as credit cards or buy now pay later products that can derail healthy money habits and drain your finances.

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2. Set financial goals

Have a plan to work towards by setting goals – make them clear, and develop an action plan to make them happen. For instance, open a dedicated account to save a first home deposit. Plenty of online calculators are available that can show how much you need to save each payday to reach your target deposit.

3. Invest little, invest often

In our 20s we have time on our side to make the most of compounding returns. Consider investing in shares or exchange traded funds (ETFs), then make a habit of investing a little more on a regular basis, maybe $500 each quarter. Aim to hold onto your investments for the long term – about five to 10 years.

Part of investing involves selecting the super fund that’s right for you. Then don’t forget your super whenever you change jobs.

Man in 30s
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The thoughtful 30s

Our 30s is the stage when life really starts to take shape, and good money management can make a great decade even better.

1. Step onto the property ladder

Buying a home is expensive, and if you can’t afford to buy where you want to live, becoming a rentvestor can be the next best option. As a rentvestor you keep renting in the area you want to live in and buy an investment property in a more affordable location. It will broaden the suburbs you can afford to buy in, and you’ll be getting a leg-up onto the property ladder rather than risk being priced out by continually rising values.

2. Prepare for the cost of children

If kids are a part of your life plan, now’s the time to plan ahead. Small babies can generate surprisingly big bills, so aim to tuck away savings to manage the cost of raising a family.

Decide which schooling option you want for your children – public or private – and kickstart an investment plan to save for education expenses. From shares to education bonds, there are a variety of options to choose from. The key is to start early. That way, investment returns will do more of the heavy lifting.

3. Show your super some love

As a 30-something, you and your super are likely to be long term acquaintances. Now’s the time to show your super some love by making small additional contributions of your own. Adding just a few extra dollars each week can make a valuable difference to the value of your final nest egg.

If you’re comparing superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.

Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group specified above.

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Our flat-out 40s

Your 40s are likely to be among the busiest years of your life, but taking time to nail money matters can deliver worthwhile rewards.

1. Pay off the mortgage

Chances are you have a growing brood, a home of your own, and you’re juggling work with family needs. It’s a hectic life stage. This is also a time when extra home loan repayments – no matter how small – can pack a real punch, helping you become mortgage-free sooner, and potentially cutting tens of thousands of dollars off the long term interest cost.

Make a habit of reviewing your home loan at least annually to be sure you continually have the best deal. Don’t be afraid to ask your current lender for a better rate, or consider refinancing if it helps you save. Just make sure to factor in any costs involved.

2. Ramp up your wealth

At this stage you may have a decent chunk of home equity to your name. It’s a powerful financial resource that can be put to work accelerating your wealth. Use home equity as a low cost source of funds to renovate your home (improving its value and your lifestyle), buy an investment property, or add to your sharemarket portfolio.

3. Protect yourself against curveballs

In our 40s we begin to reap the benefits of hard work and careful planning – a comfy home, a decent lifestyle and healthy career prospects. All this is worth protecting.

You probably have insurance for your home and contents as well as cover for your car, but the real financial driver of your lifestyle is you – and your ability to earn a regular income.

Check out how much life insurance you have through super. If it’s insufficient, consider topping up the level of cover in your fund or taking out direct life insurance outside of super. Your super fund may also offer income protection cover. If it doesn’t, think about taking out separate income protection insurance – the premiums can usually be claimed on tax.

While you’re looking at insurance, don’t forget to maintain an up-to-date will and complete a binding nomination for your super. This can further protect your family if the unexpected happens.

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The fantastic 50s

You’ve come a long way but it’s important to continue planning ahead.

1. Review your investment mix

At this stage, you’ve hopefully built up a reasonable portfolio of investments – a handy blend of shares, ETFs, maybe an investment property, and your super. The key is knowing whether that mix reflects how you feel about risk as you move through your 50s.

When we’re younger, we can afford to take on more risk. As we age, we tend to be more conservative. Remember though, you could live another 30-plus years, so it may still make sense for your portfolio to have exposure to growth assets such as shares, ETFs or property.

Set a date to review your portfolio annually to be sure it continues to be diversified across different asset classes. This can potentially protect you against the full brunt of falls in any one investment market.

2. Find your super sweet spot

Our 50s sees many of us become empty-nesters, and major expenses such as a home loan and education costs, should be behind you. That means more spare cash to boost your super ahead of retirement. Use a Retirement Planner calculator to know if your super is on track to deliver your ideal retirement lifestyle.

If your super could do with an uptick, talk to your employer about salary sacrificing part of your before-tax pay into super. If the boss won’t come to the party (and they’re not obliged to), think about making additional contributions out of your own pocket. You may be able to claim a tax deduction for personal super contributions that you made to your super fund from your after-tax income, according to the ATO. Just make sure you stick to the caps.

Adding to your super is especially important if you’ve been running your own business. Without the benefit of employer-paid super, self-employed Australians typically retire with around half the value of super savings of employees, according to research by ASFA.

3. Wind down debt

No matter whether you plan to retire at 60, 70 or later, winding down personal debt is a smart money move for your 50s. Entering retirement debt-free means more to spend on your lifestyle without the cash drain of interest paid to lenders.

The challenge to winding down debt is that many Aussie parents are increasingly giving their grown-up children a financial helping hand. This cash splurge can make it difficult to pay off debt, and as a result, many older working Australians may retire with debt. Try not to let giving your kids a head start compromise your own financial wellbeing.

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The super 60s

Our 60s look very different today than they did for past generations – 60 really is the new 50, and life is yours to enjoy.

1. Embrace your super

After growing your super throughout your working life, it can call for a complete change of mindset to start dipping into your nest egg at retirement. Coupled with this, retirees are often fearful about outliving their super. A Monash University study highlighted the extent of this concern, finding that most people stick to the minimum drawdowns for their super, and as a result, end up richer in death than in retirement.

Rather than cut your lifestyle short, consider tapping into professional financial advice. It can help you decide the best way to use your super, how to maximise retirement income – including accessing the age pension – and let you minimise risks around exhausting your super at an early stage. Most super funds offer free or low-cost retirement planning seminars plus an affordable financial advice service to help you make the right choices.

2. Consider downsizing

As a 60-something, it’s a fair bet you’ve owned the same home for some time. The trouble is, the features that were once must-haves may now be lifestyle millstones – a pool that hardly ever gets used, several empty bedrooms, and a lawn that demands regular mowing.

The idea of downsizing can be an emotional wrench. But it can also offer plenty of pluses including lower-maintenance living, reduced upkeep costs, and an opportunity to boost your super.

If you’re aged 65 years or older, you may be able to make a downsizer super contribution of up to $300,000 from the proceeds of selling your home. If you and your spouse/partner own the home together, each of you can contribute up to $300,000, potentially turbo-charging your combined super savings by $600,000.

Downsizer contributions are non-concessional, so the 15% contributions tax doesn’t apply, and the money won’t count towards your contributions caps. This means you can still make a downsizer contribution even if you have $1.6 million or more in super, explains the ATO.

It’s worth stressing that downsizing isn’t the beginning of the end. Look at it as ‘right-sizing’ – an opportunity to embrace a new chapter that can resemble your 20s, where you’re free to focus on you.

3. Plan for your aged care

As we move through our 60s, aged care is something to plan for. Here too, time may be on your side. The average age for entry to permanent residential aged care is 82 for men and 85 for women. This gives you time to discuss your care preferences with family members. That matters because it’s much easier to make good decisions when there’s no pressure to make on-the-spot choices.

Aged care is an area where you could benefit from professional advice. The system is complex, and you may need to make decisions around whether to sell your home or rent it out to cover the cost of care.

None of us can stop the clock at a particular life stage. That’s not a bad thing as each decade brings new and rewarding experiences. By managing your money wisely, you can make the most of every age. Start your plans today, no matter where you are in life, to chart a new course for your financial wellbeing.


Cover image source: Ollyy (

This article was reviewed by Editorial Campaigns Manager Maria Bekiaris before it was published as part of our fact-checking process.


Nicola FieldAbout Nicola Field

Nicola Field is a personal finance writer with nearly two decades of industry experience. A former chartered accountant with a Master of Education degree, Nicola has contributed to several popular magazines including the Australian Women’s Weekly, Money and Real Living. She has authored several best-selling family-focused finance books including Baby or Bust (Wiley) and Investing in Your Child’s Future (Wiley).


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