Financial planning tips for Gen Z and young Australians: Strategies to build wealth

Damon Tuthill
7 hours ago
6 min read

Many young Australians today feel like getting ahead financially is harder than ever.

Recent data from the Centre for Independent studies: Generation Trapped highlights why: rising living costs and housing affordability are making traditional wealth pathways feel out of reach.

It’s no surprise that many people feel uncertain about where to start.

But while the environment has changed, the fundamentals of building wealth haven’t.

Starting with the basics and taking consistent action can still make a meaningful difference to you in the long run.

Build your foundation first

Before looking at big investments, you need to gain control over your daily cash flow. This isn't about restricting yourself; it’s about creating a structure that gives you freedom later. Focus on three things first:

Track your spending: Know exactly what is coming in and going out.
Set a simple budget: Give your money a job so you aren’t wondering where it went at the end of the month.
Create an emergency buffer: Aim for a small "rainy day" fund to cover unexpected costs without relying on credit.

Once you have this safety net, you can move toward managing high-interest debt or costs you might have and focusing on long-term goals.

How much do I actually need to start investing?

A common question I get from younger clients is, "How much do I actually need to invest?" The reality is that there is no fixed amount.

In your 20s, time is your biggest asset, not your income.

Building the habit is more important than the dollar figure. Starting small even with just $50 a week can be incredibly powerful. Whether you put that into a high-interest savings account (some are currently offering around 5% p.a.) or a low-cost Exchange Traded Fund (ETF), the nature of compound returns means that starting small today often leads to a better outcome than starting with much larger amounts later in life.

Make your money work for you

Once your foundation is solid, you can start exploring different MoneySmart is a great source to break these down. Most people use a mix of two main categories:

Defensive investments (Low risk): These include things like high-interest savings accounts or bonds. They are great for short-term goals (one to three years) because your money is safe and easy to access, though the returns are usually lower.
Growth investments (Higher risk): These include shares, Exchange-Traded Funds (ETFs), and property. An ETF is a basket of assets (like stocks or bonds) that you can buy and sell on a stock exchange, just like a single share. This offers instant diversification and is a simple, low-cost way to invest for the long term. MoneySmart has more on ETFs. These are designed for long-term wealth (5+ years). While their value goes up and down in the short term, they have the potential for much higher returns over time.

Don’t overlook your super

Superannuation is one of the most powerful wealth-building tools you have, yet many young people ignore it. Because it is a long-term investment, even small extra contributions made now can grow significantly by the time you retire due to compounding interest. Plus, there are often tax advantages to putting a bit extra into your super early on.

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How can I use Super to buy my first home?

The government’s First Home Super Saver (FHSS) scheme is basically a high-speed savings bucket hidden inside your Super.

Instead of saving in a normal bank account where the taxman takes a big chunk of your pay before you can save it you can ask your boss to put some of your "pre-tax" pay straight into your Super. This is called salary sacrificing.

Why it works:

The 30% Boost: Because you’re taxed less on money inside Super, you could save your deposit about 30% faster than using a standard savings account.
The Limit: You can save up to $15,000 per year (up to a total of $50,000). If you're buying with a partner, you can combine your totals for a $100,000 head start.
Better Interest: The government adds "earnings" to your savings, which is usually a better rate than a basic bank account.

It’s paperwork-heavy.

You must ask the ATO for a "determination" before you sign a contract for a house. If you sign first, you might not be able to get the money out. Check your eligibility for the scheme or contact me for a guide on how you can understand the schemes using the ATO's simple guide. ATO's simple guide.

Renting vs buying: What should you think about?

The Australian Dream usually means owning a home, but for many young people, there are other ways to build a secure future. Neither option is perfect; it all depends on your lifestyle and goals. You can use the Moneysmart Rent vs Buy Calculator to see how the numbers compare for your specific situation.

Renting for flexibility: Renting allows you to live in areas where buying is too expensive (like near the city or beach). It’s great if you want the freedom to travel or move for work without being tied to a 30-year mortgage.
Buying for stability: Owning a home means no landlords can ask you to move. Over the long term, property usually increases in value, which helps build your wealth. If you are looking to get started, the Home Guarantee Scheme can help you buy with a smaller deposit.
The Rentvesting strategy: This is very popular right now. It means you rent where you want to live for lifestyle, but you buy an investment property in a more affordable area. This gets you into the property market early while still letting you live where you love.

Cut through the noise and get started

There is a lot of financial "noise" online, which can lead to over-complicating things or chasing "get rich quick" trends. The most effective path forward is usually the simplest:

Stick to reliable sources like the Productivity Commission for economic insights.
Avoid comparing your financial journey to what you see on social media.
Focus on small, consistent habits rather than waiting for a "perfect" time to start.

Financial advice doesn’t have to be a lifelong commitment. Often, a single conversation can help you clarify your priorities and avoid expensive mistakes.

Common money mistakes to avoid

When you’re starting out, it’s easy to fall into a few common traps. Being aware of them is the best way to keep your progress on track:

Social media influence: It is easy to feel like you’re falling behind when you see others posting about fancy holidays or expensive clothes. Remember that most "lifestyle" posts are a highlight reel, not a financial reality.
Lifestyle inflation: As soon as you get a pay rise, it’s tempting to spend it all on a nicer car or more expensive hobbies. If you can keep your expenses the same and save the extra money instead, you'll build wealth much faster.
Not having a budget: Living without a plan makes it hard to know where your money is going. Even a simple "50/30/20" plan (50% for needs, 30% for wants, 20% for savings) can change everything.
Emotional investing: Buying into a trend because of "FOMO" (fear of missing out) or selling your investments when the market drops is a common mistake. Building wealth is about staying calm and thinking long-term.

How Aspire2Wealth can support you

At Aspire2 Wealth, we help young Australians clear the confusion and build practical strategies. Whether you want to set up a solid financial foundation, understand your investment options, or plan for your first home, we’re here to help.

Sources:

Aspire2 Wealth Advisers Pty Ltd ABN 42 125 897 903 is an authorised representative and credit representative of Charter Financial Planning Limited ABN 35 002 976 294, AFSL and Australian Credit Licence No. 234665.

This website contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.