There’s no question that your 20’s is a very special period of your life. There’s a timid but gratifying feeling about becoming an adult, moving out of home, and being financially self-reliant. Whether or not you began a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a significant decade from both a personal and financial point of view. Regardless of what path you choose, the one constant that will continually remain in your life is money.
The fact of the matter is, the sooner you begin saving money and building wealth, the better your financial condition will be in the future. Regardless of whether you want to get married, start a family, or secure a property, there are particular financial objectives that every person in their 20’s should attempt to reach to secure a better a future. In this blog, we’ll be taking a closer look at these targets and how you can begin creating healthy financial habits.
Set up a budget
Building healthy financial habits begins with knowing how to budget. Being able to spend less money than you make is the key to saving money, so start taking control of your finances by forming a budget and sticking to it! With a paper and pen, jot down your monthly income and expenditures. Inspect your expenses to uncover which can be reduced, or which can be eliminated completely. Some ways to cut down your expenditures are electing to eat at home rather than eating in restaurants and swapping your Cable TV subscription to streaming services like Amazon instead.
Remove your debts
Whether you’ve travelled the world or have student loan debts, the faster you repay these debts, the better. Interest compounds as time passes, so paying off your debts by slashing expenses or working a second job may save you thousands of dollars in only a few years. These savings can then be invested in a high-interest term deposit as an example, which will put you in a far better financial position than simply making the minimal monthly repayments on your debts.
Create an emergency fund
Life almost never works out the way you planned, so it is vital to be prepared for any unforeseen changes that may be necessitated. You may end up out of a job, or in an incident that inhibits you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial specialists propose that all folks should have a dedicated emergency fund that is capable of supporting their living expenses for three to six months.
Insurance protects you financially from any detrimental consequences, for example income insurance should you lose your job, medical insurance for unforeseen medical expenses, and vehicle insurance in the event your car is stolen. Even though it’s not always sensible to get every form of insurance available, it’s definitely a clever idea to assess your individual situation to see which is best suited to you. For instance, health insurance is recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may result in significant damage to your financial situation.
Invest in a diversified portfolio
If you’ve been able to save a particular amount of money that is otherwise sitting idle in the bank, look at investing this money in a high-interest term deposit. After you’ve got more money saved, consider purchasing some property, or investing in gold. The key to a solid investment portfolio is ‘diversification’, meaning that you deal with the risks of investment by putting your eggs in different baskets, so to say.
Seek financial help as soon as possible
If, for whatever reason, you’ve ended up in financial distress, the best advice is to seek financial assistance as soon as possible. Lots of people battle with financial complications for years before finding help, which puts them in a worse position as their debts will only compound as time passes. The sooner you seek financial assistance, the more options are available to you, so if you require any assistance with your financial condition, talk with the specialists at Bankruptcy Advice on 1300 879 867, or visit our website for further information: Bankruptcy Advice