I am an Aussie so will do my equivalents
WHAT
0. Pay the minimum required on all debts. -
Dont have any debts besides mortgage, got mortgage aged 241. Establish an emergency fund to your satisfaction. See
https://www.bogleheads.org/wiki/Emergency_fund. Use your mortgage offset account OR use springy debt
http://www.mrmoneymustache.com/2011/04/22/springy-debt-instead-of-a-cash-cushion/ .
Had an emergency fund from when I moved out fo home ages 17, it was one month of my income at the time(about $1200 a month), this has grown and is now about 3 months worth of expenses 2. Pay off any debts with interest rates above your mortgage rate (if you have one)
not relevant3. Put money into your PPOR mortgage offset account (if you have one).
Age 24, when I got my first home 4. If your taxable income is less than $51,021 (before salary sacrifice) consider contributing $1000 per year to superannuation to get the Government co-contribution.
I was contributing extra to my super from about 19, but didnt ever do the whole $10005. Pay off any debts above the return you can get on your investments.
not relevant6. If you taxable income is more than $37,000 optimise Salary Sacrifice into Superannuation - you need to work this out individually, because how much depends on at what age you will ER, how much is already inside/outside superannuation, and your marginal tax rate.
First year my income was about $37k I did a bit, probably not maximised it but I was saving for a home deposit7. Invest any extra into low cost index funds (long term investments - 10 years) or high interest accounts (short term - 2 or 3 years).
Started investing outside of super in 2010, but didnt do index funds until I was 28, but was saving in highish interest accounts from 18 when I started saving for my first house WHY
0. Don't get yourself into trouble.
1. Give yourself at least enough buffer to avoid worries about paying bills.
2.& 3. Because it's untaxed, the effective return on a mortgage offset account is likely to be the highest percent return you can get on your money
4. When the government is giving you money - take it.
5. It's better to pay off expensive debt than to invest.
6. Salary sacrifice is taxed at 15% as it goes into superannuation and people on low incomes have a lower tax rate. You will need other money to last you between when you retire and when you are eligible for superannuation. However superannuation tax rates are low.
7. Because earnings, even if taxed, are beneficial. If you are saving for the short term (eg. a house deposit whether PPOR or IP), you want to be absolutely sure that you will get back what you saved, but longer term savings are better off in an index fund.