How to handle big financial decisions in your 20s, 30s and beyond


Our financial priorities naturally shift over the years, as our wants and needs change with age and circumstance. But its easy to become overwhelmed when making big financial decisions or purchases, leading to oversights and poor investments.


Here are some tips on what to consider when those big purchases roll around during each decade.


20s


In your 20s, you’re welcoming the first enormous change in your financial life – personal responsibility. This is the time when many of us finish university, move out of home and start our first ‘real jobs’. This first real taste of financial freedom and disposable income can be intoxicating, but its important to learn good habits now and start putting some plans in place to reach long-term financial goals.


For many twenty-somethings, the greatest financial decisions revolve around lifestyle. If travel is your priority, think about where you want to go and the standard of living you want while away – are you ok backpacking and staying in hostels, or would you be happier in a proper hotel? Are there a few destinations you want to visit close together, warranting a longer trip? Sign up for travel and airline newsletters that alert you to sales so your dollar stretches further, and check out our advice on how to fund your dream vacation.


A car is also a typical investment for people in their 20s. You’re probably not financially ready to cruise around in a Ferrari just yet, but you’re also in the market for something a bit nicer than the rust-buckets many of us had as our first cars. Make a list of your must-have features, and those that would be nice to have and keep this handy when considering the kind of car you would like to purchase. Don’t forget to budget in things like insurance, registration and repayments, if you’re buying your car outright, and read this handy guide to what to look for when buying a car as well.


30s


Your 30s are often when you’re looking to put down some more long term roots, and this often centers around two of the biggest commitments – both personally and financially – we make in our life: getting married, and owning a home.


There are more options available for creating your dream wedding than ever before, but a desire to curate a day that is completely unique to you and your relationship often comes with higher costs. The average cost of a wedding in Australia is now $65,482, and while there are many suggestions out there for how to budget and plan your wedding, each couple needs to decide what works for them, and think clearly and realistically about what they can afford. That doesn’t mean you have to forego the things that matter to you, you just need to prioritize.


RELATED: How to get your dream wedding at the perfect price


When it comes to your living arrangements at this age, this is when many of us decide to stop living in share houses and think about how we will go about owning a home one day. While prices at the moment have certainly left many young Australians, particularly those in their 30s, feeling like home ownership is out of reach, with a solid plan, and a willingness to look at alternatives to the traditional path to home purchase, you can get a foot on the property ladder.


You might not be able to afford or find your dream home outright, so think about buying a slightly smaller or older place, and investing your cash in renovating it to your taste – even on a shoestring budget!


40s


By now, many of you will be fairly settled – living in your own home and raising a family. As the decade progresses, many of our expenses are related to managing the necessities and comforts of family life.


As the kids grow up, or a few more come along, you will be thinking about space in the home. A renovation to add an extension, or to modify your home to better accommodate a growing family is something to consider if you’re lacking space and either are unable, or unwilling, to move to an entirely new place. Do all your research and ensure you’re getting the right expert for the job to avoid budget blow outs, delays or other construction issues. It’s also important to think long-term – how much longer will you all be under one roof before the kids leave the nest, and what will your needs be then vs now. Try to balance these considerations in order to make smart renovation decisions.


Another area where a growing family can require an upgrade is the family car. We all know that a cramped back seat is a recipe for squabbling siblings, so consider a bigger car with more space both for them, and all their friends and activities, because you’ll probably still be playing taxi driver for a few more years. Kids getting old enough to want their own wheels? Safety and reliability will be big considerations, so check out our top cars under $40k for models that might give you peace of mind when your child takes the wheel.