That is one of the three key money habits that Zuraida Ariffin of Zuraida Ariffin Wealth Creation has recommended 30-year-olds should start, in an effort to someday achieve financial wellness.
With CommBank research showing that only one in two Australian households is expected to have enough money for a comfortable retirement, the onus is on young investors to improve the way they manage their money now, rather than later.
Ms Ariffin said three simple money practices can help put young investors on the right track.
According to Ms Ariffin, those in their 30s should be continually evaluating what’s important. For those in relationships, it’s important to understand each other’s values and goals.
“It is well known that many couples have conflicts about money. Once you agree on what’s important to you, it’s time to articulate your vision for the future, including lifestyle goals – such as a home, children and their education – and how to prepare for retirement and build wealth over time,” she said.
“Clarity on your vision, particularly with a partner, will maximise the probability of you achieving your lifestyle and financial goals.”
Ramp up savings
While saving money is important for all ages, adopting this habit in your 30s will be especially important for a different reason, Ms Ariffin said.
“If you have bought a home, budgeting and saving are key to paying off the mortgage sooner. The higher your mortgage repayments, the quicker your mortgage will be exterminated,” she said.
“You would be amazed to discover that you would be able to save tens and thousands of dollars in interest. The less interest you pay to the bank, the more money you can allocate towards your lifestyle, family and wealth creation.”
Reconsider your investments
Finally, 30-year-olds should take a closer look at their investments and superannuation contributions to ensure the opportunities are maximised.
“You’ve worked hard for your money, it’s important to make your money work hard (24/7) for you. You may have sold the portfolio you built in your 20s to buy your first home. Now, you have more financial commitments; however, you may be earning a higher income,” she said.
“Your financial planner may be able to suggest gearing strategies for your diversified investment portfolio. You may wish to optimise the timing and amount of making additional superannuation contributions by taking advantage of salary sacrifice.
“Investing to build wealth allows you to build the assets that will generate strong reliable income to support your lifestyle, when you choose to retire.”