Money plays an enormous role in our journey of life. If we don’t have our money situation under control, it can affect our health, wellbeing and relationships.

The saying ‘the sooner the better’ is never truer when it comes to money. Establishing good money management at an early age can set you up for life to achieve financial freedom, stability and a comfortable retirement. It’s never too late to make positive changes.

Here are some savvy money tips as you move into each phase of your life.

Start off in your 20s

Life can feel free and easy in your twenties with potentially no children and no mortgage. You can burn every penny you earn to your heart’s content. However, this is also the ideal time to create a strong financial foundation.

Set financial goals – Make yourself some short and long-term goals. Estimate the cost and time frame of your goals and set up a savings plan. Remember, the earlier you start achieving your investment goals the better placed you will be later in life.

Create a budget and stick to it – Budgeting will help prepare you for future ‘adulting’ and life’s many expenses. Almost 80% of Australians have a budget and of those, one in five continue to stick to their budget¹. Do you?

Track your spending – Keep watch of exactly where your money is going and on what. This will enable you to be more conscious of your spending habits and help in finding ways to improve your spending and finances.

There are great apps available to assist you with tracking your money.

Build a good credit score – Paying your bills and debts on time will help build a good credit score for future loans.

Set up an emergency fund – One of the best steps you can take in your twenties is to establish an emergency fund to cover the cost of unexpected expenses. This will help you to avoid having to take out a high-interest debt (eg credit card) for emergencies.

Create your financial future in your 30s

This is a decade where your financial decisions could become more complex. You may ramp up your career, perhaps get married, start a family and enter the property market if you have not already. It is important to start and end these years with finance finesse.

Enter the property market – While buying a home is expensive, your early thirties really is an opportune time to enter the property market. If not your own home to live in, an investment property to rent out can be an affordable first rung on the property ladder.

Prepare for a growing family – If children are part of your future, your thirties is the time to plan, and rightly so. One report found the cost of raising two children would likely range from $474,000 to $1,097,000 over the course of their childhood².

Survive the 40s

Your 40s will likely be the most hectic years of your life. You may be part of the sandwich generation with a growing family and career, paying off a mortgage and potentially caring for aging parents.

Make a dent in your mortgage – Extra home loan repayments can help bring your mortgage down sooner and potentially save you thousands of dollars in interest alone. Review your home loan regularly to ensure you are getting the best deal possible. Interest rates can change, as can features and fees.

Build wealth through equity – If you have had a mortgage for some time, you may have built up some home equity (the difference between the current value of your property and the amount you still owe on your loan). Tap into your home equity to renovate your home and potentially improve its value or invest in another property to build wealth.

Protect you and your loved ones – While increasing your wealth is important you should also focus on personal insurance and an estate plan. Ensuring you have ample life, income protection, total and permanent disability (TPD) and trauma insurance cover can help protect you and your family should the unthinkable happen. If you have worked hard to amass a reasonable size estate, it makes sense to protect it.

Ramp up in your 50s

Middle age is generally the period of life when you will be at your most prosperous. Some of us in our fifties become empty nesters. With some major expenses behind you, you may have cash freed up to clear debt and further boost your wealth.

Set your retirement goals – With retirement potentially only a decade or so away, keeping a firm eye on your retirement goals will help you achieve your desired retirement lifestyle. Be specific on your ideal lifestyle. What will be your cost of living? Where would you like to live? Can you afford the real estate market in that area?

Prepare to retire without debt – You may be tempted to give your children a financial helping hand, but if you do, keep in mind the impact on your retirement goals. Retiring debt-free will mean a better lifestyle without any money strain.

Review your investment and superannuation portfolio – With another 30-plus years or so to live, it is important to keep an eye on your superannuation and investments to ensure they will meet your needs as retirement nears. Review your portfolio each year, make decisions with your retirement goals in mind and at a level of risk you are comfortable with.

According to the Association of Superannuation Funds of Australia, the average annual budget for people aged around 67 is $45,239 for singles and $63,799 for couples to enjoy a comfortable retirement³. But Australians between 60 and 64 years old are retiring with a median super balance of $163,985 for males and $128,507 for females⁴.

Enjoy the super 60s

Some might say that life begins at 60. It is even backed by research! But don’t let these fancy-free feelings get the better of your budget.

Live within your budget – To make sure your retirement savings are healthy to support you through the rest of your life, it is good practice to review your budget to look at ways you can cut back on spending to boost your retirement dollars.

Consider downsizing – Downsizing can free up cash to live your twilight years but it should not be done without good research and independent advice. Selling your home may affect your government benefits. Conversely, you may be able to contribute up to $300,000 from the sale of your home to your super – refer to the ATO website for details.

Plan your future aged care – Your future aged care requirements may influence your financial decisions in your 60s – research, research, research.

Most people have good intentions when it comes to their financial situation but we often focus so much on short term goals that we miss the long term, bigger picture aimed at securing our financial future. If in doubt, don’t hesitate to reach out to a finance specialist who can assist you in setting up your financial future to ensure fruition during relevant phases of your life.

Follow these smart money choices to make the most of your finances throughout each stage of your life.