There’s no question that your 20’s is a very unique stage of your life. There’s a nervous but exciting feeling about becoming an adult, moving out of home, and being financially independent. Whether or not you started a career, a university degree, or spent time traveling the globe and gaining life experience, your 20’s is an important decade from both a personal and financial context. Whichever path you decide upon, the one constant that will constantly remain in your life is money.
The truth of the matter is, the sooner you begin saving money and developing wealth, the better your financial scenario will be in the future. Regardless of whether you wish to get married, start a family, or buy a house, there are particular financial goals that every person in their 20’s should attempt to reach to secure a better a future. In this article, we’ll be taking a closer look at these goals and how you can start developing healthy financial habits.
Establish a budget
Constructing healthy financial habits starts with understanding 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 setting up a budget and following it! With a pen and paper, jot down your monthly income and expenses. Look over your expenses to see which can be decreased, or which can be cut out totally. A few ways to reduce your expenses are opting to eat at home in lieu of eating out and replacing your Cable subscription to streaming services like Netflix instead.
Remove your debts
Whether you’ve traveled overseas or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so repaying your debts by cutting expenses or working a second job can save you thousands of dollars in only a number of years. These savings can then be invested in a high-interest term deposit for example, which will place you in a far better financial position than simply making the minimum monthly repayments on your debts.
Create an emergency fund
Life seldom works out the way you planned, so it is vital to be prepared for any unanticipated adjustments that may be needed. You might end up unemployed, or in an incident that hinders 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 recommend that all people should have a devoted emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any undesirable consequences, for instance income insurance in the event you lose your job, medical insurance for sudden medical expenses, and vehicle insurance in case your car is stolen. Though it’s not always a good idea to get every kind of insurance available, it’s unquestionably a wise idea to evaluate your individual situation to see which is best suited to you. For instance, medical insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may lead to significant damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed to save a particular amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. Once you’ve got more money saved, think about purchasing some property, or investing in gold. The key to a sound investment portfolio is ‘diversification’, meaning that you handle the risks of investment by putting your eggs in different baskets, so to say.
Get financial assistance as soon as possible
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial assistance as soon as possible. Too many individuals struggle with financial complications for years before getting 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 need any help with your financial position, speak to the professionals at Bankruptcy Advice Perth on 1300 879 867, or visit our website for additional information: www.bankruptcy-advice.com.au/perth