There’s no question that your 20’s is a very precious stage of your life. There’s a jittery but exciting feeling about becoming an adult, moving out of home, and being financially independent. Whether or not you launched a career, a university degree, or spent time traveling to other countries and gaining life experience, your 20’s is a valuable decade from both a personal and financial viewpoint. No matter what path you decide upon, the one constant that will always remain in your life is money.
The truth of the matter is, the sooner you start saving money and creating wealth, the better your financial condition will be in the years to come. Regardless of whether you wish to get married, start a family, or purchase a property, there are certain financial objectives that every individual in their 20’s should endeavour to accomplish to secure a better a future. In this post, we’ll be taking a closer look at these targets and how you can begin building healthy financial habits.
Construct a budget
Constructing healthy financial habits starts with learning how to budget. Being able to spend less money than you earn is the key to saving money, so start taking control of your money by setting up a budget and following it! With a pen and paper, list your monthly income and expenses. Investigate your expenditures to see which can be reduced, or which can be removed altogether. A few ways to reduce your expenses are opting to eat at home instead of eating in restaurants and swapping your Cable TV subscription to streaming services like Netflix instead.
Get rid of your debts
Whether or not you’ve travelled overseas or have student loan debts, the quicker you repay these debts, the better. Interest compounds as time passes, so repaying your debts by slashing spendings or working a second job could save you thousands of dollars in only a number of years. These savings can then be invested in a high-interest term deposit as an example, which will put you in a much better financial position than merely making the minimal monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so it’s important to be prepared for any unanticipated changes that may be needed. You may end up out of a job, 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 strongly recommend that all people should have a devoted emergency fund that is capable of supporting their living expenses for three to six months.
Insurance protects you financially from any detrimental consequences, for instance income insurance in case you lose your job, medical insurance for unplanned medical expenses, and vehicle insurance in the event that your car is stolen. Though it’s not necessarily appropriate to get every kind of insurance available, it’s certainly a wise idea to analyse your individual circumstances to see which is best suited to you. For instance, health insurance is highly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may lead to considerable damage to your financial position.
Invest in a diversified portfolio
If you’ve managed to save a certain amount of money that is otherwise sitting idle in the bank, think about investing this money in a high-interest term deposit. After you’ve got more money saved, consider buying some property, or investing in gold. The key to a solid investment portfolio is ‘diversification’, meaning that you regulate the risks of investment by putting your eggs in different baskets, so to say.
Get financial help immediately
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial help immediately. A lot of people battle with financial issues for several years before getting help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial advice, the more options are available to you, so if you require any help with your financial position, get in contact with the specialists at Bankruptcy Experts Taree on 1300 795 575, or visit our website for further information: www.bankruptcyexpertstaree.com.au