There’s no doubt that your 20’s is a very enjoyable stage of your life. There’s a nervous but gratifying feeling about becoming an adult, leaving home, and being financially self-reliant. Regardless of whether you began a career, a university degree, or spent time traveling the world and gaining life experience, your 20’s is an important decade from both a personal and financial perspective. No matter what path you choose, the one constant that will constantly remain in your life is money.
The reality of the matter is, the sooner you begin saving money and creating wealth, the better your financial prospects will be in the future. Regardless of whether you want to get married, start a family, or buy a home, there are a number of financial targets that every individual in their 20’s should strive to accomplish 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 begin developing healthy financial habits.
Establish a budget
Creating healthy financial habits starts with learning 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 forming a budget and following it! With a paper and pen, write down your monthly income and expenses. Review your expenses to find out which can be reduced, or which can be eliminated totally. Some ways to cut down your expenditures are choosing to eat at home instead of eating in restaurants and substituting your Cable subscription to streaming services like Netflix instead.
Get rid of your debts
Whether you’ve travelled the world or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so paying off your debts by slashing spendings or working a second job might 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 place you in a significantly better financial position than just 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 adjustments that might 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 a bit of breathing space when you need it the most. Financial specialists propose that all people should have a dedicated 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 should you lose your job, medical insurance for unpredictable medical expenses, and vehicle insurance in the event your car is stolen. Even though it’s not always beneficial to get every form of insurance available, it’s undoubtedly a smart idea to evaluate your individual circumstances to see which is best suited to you. For instance, health insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unforeseen incident may result in 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, look at 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 sensible 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 immediately
If, for whatever reason, you’ve ended up in financial trouble, the best advice is to seek financial assistance immediately. Too many people wrestle with financial complications for several years before seeking help, which puts them in a worse position as their debts will only compound over time. The sooner you get financial guidance, the more options are available to you, so if you require any guidance with your financial condition, talk to the specialists at Bankruptcy Experts Rockingham on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsrockingham.com.au