Baby Boomer John, 65, looks back on a lifetime of financial decisions to provide some valuable tips to future generations.

Remember when you spent a small fortune on that trip to Hobart after the Wrest Point Casino opened? The holiday pay lasted barely one hour on those roulette tables! Four decades on and I’m pleased to report that trip didn’t set you on a path to financial ruin.

Without completely giving the game away, let me share some of what’s happened to our world over the past 40 years. Firstly, you survived! Those teenage years didn’t cause any irreparable damage although your knees and hips are paying the price for your Kamikaze approach to footy.

Our country has flourished – almost twice as many people call Australia home today than in 1973, most people earn in a month what you earnt in a year, and the average price of a house and land package in the early 70s (approximately $20,000) wouldn’t cover the deposit of an average home loan.

Many of the headlines you read in the morning paper in 1973 are just as relevant today – “Crisis in the Middle East”, “Prime Minister Under Pressure” and “Petrol Prices Soar”.

It’s a similar story when it comes to finances. The fundamentals of 1973 remain the same today, but as you think about the future, let me share some of the wisdom I’ve gathered over the past 40 years:

Live within your means:

This seems fairly obvious but credit facilities will become easier to access as you enter your 30s. Even your grandkids have credit cards! Cleaning up the mess of easy credit debt can put your long-term plans back many years.

Minimise debt:

The loan from your father to buy that mint-condition Ford Falcon GTHO may have made sense at the time but it would drag on for years before you paid it off. And let’s not even start on the financial commitment to purchase that first colour TV in 1977! Keep your debt to a minimum and make paying it off a priority.

Develop a savings plan:

Remember the old State Bank savings book for which Nanna would give you 20¢ to deposit each week? It was the one successful financial decision made for you in the first 20 years of your life. Consider the money that goes into a savings account an essential part of your budget. There’ll be plenty of rainy days, and any leftover will provide a solid foundation for that retirement nest egg.

Start investing:

Don’t expect me to share the previous 40 winners of the Melbourne Cup or share tips that could make you a billionaire. Start to think about how best to invest those savings – the earlier you start, the more you’ll have when you retire. Don’t forget to manage the risk too. It’s ok to put some in shares, but also look to spread it around via term deposits, property or managed funds.

Protect what is most important:

“Life insurance? What do I need life insurance for?” It may seem far-fetched now but insurance will pay for itself many times over. Hospital expenses, the odd minor car crash and a couple of ‘life episodes’ are sure to arise; when they do the peace of mind provided by insurance is invaluable. Speaking of health, stay out of the sun and watch that expanding waistline and try to lay off the bacon and eggs once in a while!

Establish Credit

It is vitally important to start establishing credit while in your 20s. A clean credit report will make life much easier in the future, especially when your partner starts dropping hints that she’d much prefer to send Junior 1 and Junior 2 to the local Grammar School and you’ll need a loan to get started. And let’s not even start on Junior 3, 4, 5 etc … just kidding!

Choose your life partner carefully:

Yes, you’ll meet a nice girl or boy and settle down, but it’ll be touch and go there for a while. For plenty of the boys from your school years, things won’t end quite as happily. While you don’t have to see eye to eye on every financial issue, someone with similar goals and values as you will make life much easier. If you plan on combining your finances with your spouse, communication and honesty are especially important.

One last tip – enjoy life!:

Money is supposed to be used, in part, for your enjoyment. Travel, entertain, take some regular golf trips, splurge here and there; you can do it all. But don’t wait. Life is here and now, and you’ll be amazed how quickly the next 40 years will fly by.

Good luck!