Let’s face it, your 20’s are really about maximising lifestyle. But, if you get smart around your money decisions, it can be a great opportunity to set yourself up and make it easier to get ahead in later years.
In your 20’s, cashflow is king. This is the single area that will have the biggest impact on your finances into the future and your lifestyle today. If you get your cashflow strategy wrong, it will be complicated to manage, difficult to track, and you can fall into common traps around tax and investing, which lead to missed opportunities to get ahead faster and easier.
To get your cashflow strategy on track, you should think about your targets, understand your options, and set up a clear plan to follow. Once you have your plan, you need to make it easy for yourself to make sure you get the outcomes you’ve planned for. Nail your cashflow strategy in your 20’s and you’ll reap the benefits in terms of investments and lifestyle today and big time in the future.
You should streamline and consolidate superannuation, particularly if you have multiple funds, to make sure your super is working hard for you (not just your super company). You should also look at how your super investments are set up so you have the right mix of investments that will grow strongly into the future. It’s really common for people to not look at their super until later years, but by making some small tweaks early on, it can mean you get much better results in the future.
Consider personal insurance as a way to protect your income and make sure this continues if something goes wrong. If you set up insurance in your 20’s you’ll save a bunch of cash in the future, and will also have some comfort knowing your key risks are managed.
When you invest, the sooner you start, the better outcomes you can expect, so you should think about your next step in building wealth. Starting a small but regular investment into a diversified share portfolio such as Australian shares or a managed fund will pay big dividends in later years. Investing regularly will also get you in a habit and make it easier to fund debt payments when you buy property.
When it comes to property, even if you’re not quite ready to buy, get clear on your strategy so you can set targets and move forward with confidence. Buying your first property can seem like a huge goal that’s really far away, but when you get clear on your numbers, how to structure the purchase, and how much it will cost, not only will it seem easier, but you’ll likely get there faster because you know exactly what you need to do to get there and when it’s possible for you.
If you don’t know all the rules and what to look out for, you’ll benefit from having an Adviser help you build your plan around cashflow, investments, and property, so you pick up on all your opportunities and don’t miss anything that might slow you down. Instead of your 20’s being a lost decade financially, take advantage of your 20’s to boost your lifestyle and your money in future years.