Young Adult Financial Checklist — What to Do in Your 20s

Start With Your Super

In your 20s, superannuation is your most powerful wealth-building tool thanks to compound interest. Check that your employer is paying the Superannuation Guarantee (currently 12% of your ordinary earnings). Consolidate multiple super accounts into one to avoid paying multiple sets of fees. Choose an investment option that matches your risk tolerance — younger investors can typically afford higher growth options since they have decades until retirement.

Build an Emergency Fund

Before investing or making big financial commitments, aim to save three to six months of essential expenses in an accessible savings account. This protects you from unexpected events like job loss, car repairs, or medical bills. Consider keeping your emergency fund in a high-interest savings account or a mortgage offset account if you have a home loan.

Check Your Insurance

Many super funds include default life insurance and TPD cover. Review your super statement to see what cover you have and whether the premiums are reasonable. If you have dependents, you may need additional life cover outside super. Income protection insurance is worth considering even in your 20s — it is often more affordable when you are young and healthy.

What to Do If You Get Financial Advice

If you seek financial advice in your 20s, your SOA should reflect your stage of life — focusing on building savings, consolidating super, and setting achievable goals. Be wary of recommendations that lock you into expensive products or ongoing fees that eat into your savings. An independent compliance check can help you assess whether the advice is appropriate for someone at your life stage.

Building Financial Foundations

Your 20s are the ideal time to build strong financial foundations. Start with a budget that tracks your income and expenses. The 50/30/20 rule is a simple starting point: 50% of income on needs, 30% on wants, and 20% on savings and debt repayment. Use budgeting apps to make tracking easier.

Build an emergency fund of 3-6 months of essential expenses before focusing on investing. Keep this in a high-interest savings account for easy access. An emergency fund provides a safety net for unexpected events like job loss, car repairs, or medical expenses.

Superannuation in Your 20s

Superannuation may seem distant in your 20s, but decisions now have a significant long-term impact. Choose your super fund carefully — compare fees, investment options, and insurance offerings. Consider consolidating multiple super accounts into one to avoid paying multiple sets of fees.

Consider making additional contributions to your super, even small amounts. Thanks to compound interest, an extra $20 per week in super in your 20s could add $50,000-$100,000 to your retirement balance. Check if you are eligible for the government super co-contribution (low and middle-income earners).

Insurance and Protection

Insurance may not seem necessary in your 20s, but income protection insurance is worth considering once you enter the workforce. It replaces a portion of your income if you cannot work due to illness or injury. Premiums are lower when you are young and healthy.

Review the default insurance offered through your super fund. While convenient, the default cover may not be right for your situation. Consider whether you need additional cover for specific risks.

Frequently Asked Questions

Should I invest in shares in my 20s?
Yes, if you have an emergency fund and no high-interest debt. Starting early allows you to benefit from compound returns. Consider low-cost index funds or ETFs for a diversified starting point.

How much should I save in my 20s?
Aim to save at least 20% of your income. This includes super contributions (which count toward savings). If that is not possible immediately, start with 10% and increase as your income grows.

Should I pay off HECS-HELP early?
HECS-HELP is indexed to CPI (not commercial interest rates) and is repaid through the tax system once your income exceeds the threshold. For most people, paying off HECS-HELP early is not a priority — focus on higher-interest debt and saving first.

Should I have a credit card in my 20s?
A credit card can help build your credit history, which is useful for future borrowing. Use it responsibly — pay the balance in full each month to avoid interest charges. Use a low-limit card initially.

Advice Fees at a Glance

Adviser fees vary widely, but benchmarks help you judge whether a quote is reasonable. Median ongoing advice fees run near $4,700–$4,800 per year (up 67% in five years; growth now ~4% annually), initial SOA preparation generally falls between $2,000 and $3,500, and top-end hourly rates hit $300–$600. Commission-based billing has largely given way to fee-for-service since the FOFA reforms.