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Financial strategies for your 20s and 30s

Financial strategies for your 20s and 30s

If you can start putting financial strategies in place early in life, you might be more likely to achieve the lifestyle you want when you retire.

At every stage of your life, you should be able to put some financial planning into action to grow your wealth and protect your assets.

Starting out 

Life goals

  • moving out of home
  • starting a relationship
  • joining the workforce
  • buying a home

Investment strategy

When you’re young, healthy and just starting out in your career, your greatest asset is time. Since your investment horizon stretches out for the next few decades, you have the luxury of taking on more risk with your investments so you can potentially earn higher returns.

You’re setting yourself up for the future, so you might consider allocating most of your portfolio towards high-growth assets, like shares and property. This means you’ll be exposed to a higher level of risk, but your finances will have plenty of time to bounce back if you make a short-term loss.

Insurance needs

If you’re in good health and you have limited financial commitments, you’re probably focused more on having fun than on taking care of yourself.

But just because you’re in decent shape, doesn't mean you don't need insurance. In fact, you’re more likely to indulge in riskier behaviour, like adventurous travel or extreme sports. From these kinds of activities, you could end up with a serious injury — or worse.

As well as getting private health insurance, it’s also a good idea to take out total and permanent disability (TPD) and life insurance, so you’re covered against the unexpected. You might also consider income protection or bill cover so you can stay on top of your expenses if you get sick or injured and have to take an extended period off work.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Commonwealth Financial Planners are representatives of Commonwealth Financial Planning Pty Ltd ABN 65 003 900 169 AFSL 231139 a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 (the Bank). Information in this document is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Commonwealth Financial Planning, its related entities, agents and employees for any loss arising from reliance on this document.