In the first part of 2015, I reached a milestone in that I am closer to age 50 than I am to age 20 (yes, I am a finance geek!). As I reflected on this, it got me thinking about what tips I would have given to my younger self. So here they are, my top four money goals to achieve before age 40.
Goal 1
Get your cash flow in order and limit use of credit cards
When I first started working, I was paid weekly via cash in an envelope from the office manager of the small business I was working for. When I was at University I also ‘signed up’ for my first ever credit card with a $500 limit.
Time and our use of cash money have changed. We often don’t even touch the stuff (cash money) anymore however, over the years I have seen credit cards get many of my clients into trouble. I would tell my younger self not to sign up for that credit card (it doesn’t help your credit rating) and to get a solid cash flow foundation in place from day one of working so I saved more early on.
Check out the great resources online at moneysmart.gov.au including some smart phone budget tracking apps.
Goal 2
Take notice of Your Superannuation
One of the great benefits of working in Australia is our retirement savings. If you were given a 9.5% pay rise today you would most likely plan to do something with that money. Superannuation is a minimum of 9.5% of your salary being paid forward to help fund your retirement.
When your annual statement arrives, check it out! Know what fund you are in and what fees you are paying. If you have more than one fund, get advice to consolidate them into one which can save you in fees and as the adverts say “make a lifetime of a difference”.
Once you are 40, you are closer to age 60 (the time you can access your super) then you are to age 20 so do some research and find the best superannuation fund that suits your needs!
Goal 3
Get some Investments and educate yourself about money
Money at the end of the day is a means to an end. It provides option and opportunity. If you can get into the property or share markets at a young age, over time you will build up more equity and in turn have more option and thus more opportunity. When I first started working, I setup a share portfolio as I didn’t have enough money to buy a property.
This gave me the step up I needed to purchase my first property and enabled me to continue building up equity (between the property and shares) providing me with the opportunity to set up my own business. This is what I would have advised my younger self to do much sooner. Investing won’t always be easy however if you educate yourself and get empowered, it will give you flexibility to explore other options and opportunities in life.
Goal 4
Check your Insurances and have a Plan
comes to health issues or not being able to work for a long period of time. Insurances can provide that protection for you and the younger you are the cheaper the premium and less potential for health concerns which insurance companies sometimes do no provide protection for.
You can also level the premium the younger you are and get significant savings over a 10-year period. If you have insurances within superannuation this can also be a great way to structure things however if you are like me and 14 and 9 months when you started working check the super policy and what insurance cover you have.
This may not be required until you are working full time and can eat away your superannuation savings very quickly.
If you need assistance in exploring these further talk to a professional but most importantly start your journey to being free around your money and creating wealth with understanding.
Scott Malcolm is Director of Money Mechanics a fee-for-service business who are authorised to provide financial advice through PATRON Financial Advice AFSL 307379. For more information email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 1300 772 643. The information provided in this article is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness having regard to your own financial goals, objectives and personal circumstances.
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