Image of people of various ages for an article on the moneysmart community about managing your money at different stages of life

How to Manage Money at Every Life Stage: Your 20s, 30s and 40s

13/02/2013 • • by Raul

Each individual’s financial priorities will evolve as they move through the various life stages.

For this reason it’s important to review your financial plan on a regular basis so as to ensure that you’re fully prepared and able to meet your financial needs.

This is the first article in a 2-part series, which takes a look at the financial management priorities of each life stage, noting the most important financial services and products to be considered at each point in one’s life.

This article explains how to manage money during your twenties, thirties and forties.

First Life Stage: 20′s and 30′s


• Finished studying
• Have started working
• Looking to purchase first vehicle / property

Financial needs for single 20 – 30 year olds:


  • Medical scheme is essential (if only hospital plan) – No medical aid? Apply for quote now!
  • Disability presents high risk and potential loss of income-earning ability must be addressed
  • Short-term cover should be used to cover belongings and avoid impacting cash flow
  • Emergency fund needs to be set up for unforeseen expenses
  • Student loans should be paid off
  • “Bad” debt should be avoided such as clothing accounts, etc.
  • Budget planning crucial for effective financial management
  • Ensure valid will is in place


 Savings / Investment:

  • Start saving for deposit on property to be purchased, as well as for vehicle



  • Start saving for retirement from first paycheque to take advantage of compound interest and learn savings discipline



Financial needs for 20 – 30 year olds with a spouse and/or children:

All of the above, PLUS Risk:

  • Life cover needs to be taken out to cover income and capital needs of children as well as to cover debt, such as bond, etc.
  • May consider life cover for spouse/partner, depending on whether they are dependent or not
  • Ensure valid will in place that caters for needs of family

Second Life Stage: 30′s and 40′s


• Married with / without children
• Looking to purchase larger property

Financial needs for 30 – 40 year olds:


  • Medical scheme for family needs to be in place
    No medical aid? Apply for quote now!
  • Life cover is essential to cover income and capital needs of spouse and children, as well as to cover debts, such as bond, etc.
  • Disability remains a concern and must be addressed
  • Short-term cover should be used to cover belongings and avoid impacting cash flow
  • “Bad” debt such as clothing accounts, etc. should still be avoided
  • Dreaded disease cover should be added
  • Will needs to be updated as family situation changes so as to address liquidity and distribution of assets


  • Should determine how much must be saved for retirement
  • Where possible, pay off more on bond in order to settle debt as soon as possible.
  • Invest aggressively towards retirement


Savings / Investment:

  • Continue to use emergency fund for unforeseen expenses
  • If individual has children start/continue saving for education
  • Other savings needs such as  holidays etc. can be budgeted for so as to avoid debt


The information in this article provides an indication of what should typically be planned for during one’s 20′s, 30′s and 40′s.

However, as each individual’s situation differs it is recommended that you talk to your financial planner to ensure that you address these priorities according to your specific circumstances.

Image of the PSG logo

For all your financial planning requirements
visit PSG Konsult or email Raul Jorge for assistance in managing your money at every stage of your life.


Venter, E. 2012, Case Studies, lecture notes distributed in Postgraduate Diploma in Financial Planning Module 4 at Stellenbosch University, August 2012.

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