There’s no question that your 20’s is a very cherished period of your life. There’s a nervous but exhilarating sensation about becoming an adult, leaving home, and being financially self-reliant. Regardless if you kicked off a career, a university degree, or spent time traveling in foreign countries and gaining life experience, your 20’s is a valuable decade from both a personal and financial viewpoint. No matter what path you choose, the one constant that will constantly remain in your life is money.
The point of the matter is, the sooner you begin saving money and generating wealth, the better your financial prospects will be in the upcoming years. Regardless of whether you plan to get married, start a family, or secure a house, there are particular financial targets that every individual 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 objectives and how you can begin establishing healthy financial habits.
Construct a budget
Developing healthy financial habits begins 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 money by establishing a budget and following it! With a pen and paper, list your monthly income and expenses. Study your expenses to find out which can be decreased, or which can be eliminated completely. Some ways to cut down your expenses are opting to eat at home rather than eating in restaurants and transferring your Cable TV subscription to streaming services like Amazon instead.
Eliminate your debts
Regardless of whether you’ve travelled abroad or have student loan debts, the faster you repay these debts, the better. Interest compounds as time passes, so paying off your debts by cutting spendings 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 for instance, which will place you in a considerably better financial position than simply making the minimum monthly repayments on your debts.
Build an emergency fund
Life rarely works out the way you planned, so it is crucial to be prepared for any unexpected changes that may be necessitated. You might 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 advisors advise 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 adverse consequences, for example income insurance should you lose your job, health insurance for unplanned medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not necessarily wise to get every type of insurance available, it’s most certainly a smart idea to analyse your individual circumstances to see which is best suited to you. For instance, health insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause considerable damage to your financial position.
Invest in a diversified portfolio
If you’ve managed to save a particular amount of money that is otherwise sitting idle in the bank, consider investing this money in a high-interest term deposit. When you’ve got more money saved, think about purchasing a property, or investing in gold. The key to a good investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.
Seek financial assistance as soon as possible
If, for whatever reason, you’ve ended up in financial turmoil, the best advice is to seek financial assistance immediately. A lot of individuals battle with financial complications for years before getting help, which puts them in a worse position as their debts will only compound over time. The sooner you get financial assistance, the more options are available to you, so if you need any support with your financial position, talk to the professionals at Bankruptcy Experts Albury on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsalbury.com.au