There’s no doubt that your 20’s is a very precious stage of your life. There’s an anxious but exhilarating feeling about becoming an adult, moving out of home, and being financially self-reliant. Whether you started a career, a university degree, or spent time traveling the globe and gaining life experience, your 20’s is a valuable decade from both a personal and financial perspective. Whatever 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 generating wealth, the better your financial condition will be in the long term. Regardless of whether you want to get married, start a family, or purchase a home, there are various financial goals that every individual in their 20’s should endeavour to reach so as to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can start constructing healthy financial habits.
Set up a budget
Establishing healthy financial habits begins with knowing 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 putting together a budget and following it! With a paper and pen, document your monthly income and expenses. Analyse your expenditures to find out which can be reduced, or which can be cut out entirely. Some ways to cut your expenditures are choosing to eat at home rather than eating in restaurants and substituting your Cable subscription to streaming services like Amazon instead.
Eliminate your debts
Whether you’ve travelled overseas or have student loan debts, the faster you repay these debts, the better. Interest compounds with time, so repaying your debts by slashing expenditures 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 as an example, which will place you in a considerably better financial position than merely making the minimum monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so itis imperative to be prepared for any unforeseen changes that may be required. You may end up out of a job, or in an accident that stops you from working, so having an emergency fund will be able to give you a bit of breathing space when you need it the most. Financial specialists propose that all individuals should have a devoted emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any adversarial consequences, for example income insurance should you lose your job, health insurance for unpredictable medical expenses, and vehicle insurance in the event that your car is stolen. Although it’s not always wise to get every form of insurance available, it’s undeniably a clever idea to assess your individual situation to see which is best suited to you. For example, medical insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause significant damage to your financial position.
Invest in a diversified portfolio
If you’ve been able to save a certain amount of money that is otherwise sitting idle in the bank, look at investing this money in a high-interest term deposit. When you’ve got more money saved, consider 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.
Seek financial assistance immediately
If, for whatever reason, you’ve found yourself in financial hardship, the best advice is to seek financial help immediately. Too many folks battle with financial troubles for several years before seeking help, which puts them in a worse position as their debts will only compound as time passes. The sooner you get financial advice, the more options are available to you, so if you need any support with your financial situation, get in touch with the specialists at Bankruptcy Experts Parramatta on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertsparramatta.com.au