Household Finances

Save Your Money at a different stages

People need money management skills at different stages of their lives to accommodate their current lifestyles. The financial needs and wants of a young family can be very different from those of a mature couple or retirees. But one thing is for certain – it's never too late to start saving.

Here's a quick guide on what families and individuals should be considering at various stages of their lives when in comes to money management.

Learn to Budget, Save and Invest From 20 to 30

At this age, most young people are just starting to join the workforce or have worked for a few years. Those who are money smart would have started budgeting, saving and investing for their future. They would also have learned that it's not how much they earn that matters, but how wisely they save and invest.

However, young people who haven't done any of these can begin doing the following when they are still in their 20s.

• Set a reasonable and practical personal or household budget. Review and update it regularly as and when the financial situation changes.
• Put aside a certain amount of money each month in a high interest saving account.
• Young Australians should also contribute more for their superannuation.
• Buy income protection insurance.
• Pay attention to financial news and learn to take financial risks on growth-oriented products such as stocks and shares, and property investments.

Establish a Family and Home From 31 to 45

Many people are either in serious relationships or married with young children at these ages. The focus is invariably shifted towards home ownership and planning for children's future. Not surprisingly, family finances will revolve around boosting the household income, securing good home loans and investing for kids.
Here are more money management tips for young families.

• Find ways to move up the corporate ladder to increase earning potential. If a spouse has to stay home to look after the kids, she can consider working from home part time or find a casual job with flexible hours.
• Families planning on buying their first homes should learn about the different home loan options available and make good use of any government incentives available, such as the First Home Owner Grant and the First Home Saver Account in Australia.
• Learn to manage home loans, credit card debts and other household debts effectively.
• Invest and plan for children's education and future. Lead by example. Have good money habits and teach children about money from young.
• Families with young children must also have ample health insurance and income protection insurance.
• Those who can afford it should seriously consider engaging a financial planner to establish long-term financial goals and build family wealth.

Experience Financial Freedom From 46 to 60

By this time, many couples would have paid off most or all of their mortgages. The kids have grown up and might have left home too. With fewer expenses, most people can find more ways to make and save money. Now would be a good time to:

• Make more super contributions.
• Diversify investment portfolio or change to more secure investments. Another consideration is using the home equity to invest in other financial products.
• Review and update insurance for health, life, disability and income protection.
• Draw up a will or ensure proper estate planning is in place.
• Review the family financial plan.

Enjoy the Golden Years After 60

Most people will be headed for retirement or have retired after 60. Those who have saved and invested wisely will be able to enjoy their golden years. As Australians are living longer than ever before, it's crucial for retirees or pensioners to continue practising smart money management.

• Understand pension entitlements and make full use of age pension benefits such as pharmaceutical benefits and the Pensioner Concession Card.
• Arrange for tax-effective income streams. One good method is to invest the superfund in a private pension. This means investing the superfund with a fund manager – exchanging the lump retirement sum for a series of regular income repayments.
• Take good care of health and maintain good health insurance.

Money Management for Various Stages of Life

Good money habits are for life. It's never too late to save and manage money wisely. People in different stages of their lives – young couples in their 20s or 30s, families with small children, mature couples on the verge of financial freedom and retirees or pensioners – can only benefit from smart money management and investment.