As you go through life, your financial goals will shift and change. Very few people have the same goals as they did a few years ago. Below is a general guide for how to get your finances in shape at every life stage.
You might not be earning a whole lot of money in your 20s, but it is the time to get good habits in place. Your focus should be on creating a budget and sticking to it, resisting the urge to borrow to supplement your income. Once you’ve mastered your budget, you’ll want to start building some savings. Saving will give you the financial freedom to make smarter choices about what to do with your money. It is a good idea to start by creating an emergency fund.
Your 30s might feel like a constant battle of working to pay the bills. You will need to be strict with your budget to ensure that you can meet your short-term goals (like a holiday with the kids) and your long-term retirement goals. You will need to consider how important your goals are and be realistic about the timeframe you want to achieve them.
At this stage in your life, you will likely be reaching your maximum earning potential and will have some substantial financial commitments, such as a mortgage. Many people struggle with lifestyle creep in their 40s. Lifestyle creep is the gradual increase in spending as your wage increases. This often results in extra purchasing, at the detriment of your savings. Before making purchases, you need to ensure you stick to your budget and prioritise purchases, so you can still save for retirement.
Your 50s should be all about maximising your superannuation. If your balance is low, you might find that you need to implement a strict budget to get back on track. Think about making contributions right up to the concessional cap.
The team at The Farm Protectors are here to help, whatever stage of life you are at. We can provide guidance on budgeting, savings, and retirement planning. Contact us today.