Make hay while the sun shines

Young family with toddler and baby walking on gravel path.

Many modern couples are choosing to delay marriage and children so they can establish themselves financially first.

According to the new AMP.NATSEM Income and Wealth Report, Modern Family, the median age for women to tie the knot is now 28 years, while for men it is almost 30^. This is an increase of more than three years since 1991 when the median age to marry was 24.5 years for women and 26.7 for men.

The new research has also found women are having their first baby later in life, with the median age for first-time mums now 28.9 years, up from 25.3 in 1981.

This means it is now common for people to spend a number of years in the workforce before they embark on married life and starting a family. So how can young people make the most of their early earning years to set themselves up for a more secure financial future?

Tips for people to make hay while the sun shines and get ahead financially:

1. Get into the habit of saving

A good rule of thumb is to save around 10 per cent of your income. An online high interest savings account is a good place to stash your cash.

2. Salary sacrifice into super from an early age

The earlier you start, the larger your nest egg will be. Retirement might not be on your radar, but it’s a smart move to start salary sacrificing before you have too many financial responsibilities such as a mortgage and family. A financial planner can help you put a robust financial plan into action.

3. Be careful of debt

It’s difficult to build wealth if you’re drowning in debt. Mobile phones are a core part of young people’s social lives, but they can also be one of the biggest debt traps. Credit card debt and car loans are also common pitfalls.

4. Spend your money wisely

It’s tempting to blow your cash on designer clothes, a new car or going out. Sure, it’s ok to have some fun, but you need to make sure you are putting some of your money away for the future. One Saturday night out with friends could cost you as much as $200 by the time you add up the cost of dinner, drinks and a taxi home. And if you are doing that every week, that’s $800 a month!

5. Plan to get an early foot on the property ladder

Start saving for a deposit for your first home as soon as possible as it can take a few years to get enough money together.

6. Get income protection

You wouldn’t drive your car out of the garage without insurance, but many young people leave the house each day without protecting one of their most important assets – themselves and their ability to earn an income. What would you do if the worst happened and you were unable to work due to illness or an accident? Remember, it’s much easier to get income protection while you are young and healthy. If cash flow is an issue, consider taking out income protection inside your super.


Greg Major is an Authorised Representative of AMP Financial Planning Pty Ltd, ABN 89 051 208 327, AFS Licence No. 232706.

Any advice given is general only and has not taken into account your objectives, financial situation or needs.  Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.

 ^Source: AMP.NATSEM Income and Wealth Report, “Modern Family”, October 2013