There’s no doubt that your 20’s is a very unique phase of your life. There’s a timid but exciting feeling about becoming an adult, leaving home, and being financially independent. Whether or not you launched a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a momentous decade from both a personal and financial perspective. Whichever path you decide upon, the one constant that will continually remain in your life is money.
The point of the matter is, the earlier you start saving money and creating wealth, the better your financial condition will be in the upcoming years. Regardless of whether you wish to get married, start a family, or invest in a house, there are certain financial targets that every person in their 20’s should strive to accomplish in order to secure a better a future. In this blog, we’ll be taking a closer look at these targets and how you can begin constructing healthy financial habits.
Set up a budget
Building healthy financial habits begins 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 finances by creating a budget and following it! With a pen and paper, write down your monthly income and costs. Take a look at your expenses to see which can be reduced, or which can be eliminated totally. Some ways to lessen your expenditures are electing to eat at home rather than eating out and transferring your Cable subscription to streaming services like Amazon instead.
Remove your debts
Whether or not you’ve travelled overseas or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so repaying your debts by cutting spendings or working a 2nd job may 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 just making the minimum monthly repayments on your debts.
Develop an emergency fund
Life rarely works out the way you planned, so it is vital to be prepared for any abrupt changes that may be needed. You could find yourself out of work, or in an unfortunate incident that stops you from working, so having an emergency fund will be able to give you a bit of breathing room when you need it the most. Financial specialists advise that all individuals should have a dedicated emergency fund that is capable of supporting their living expenses for three to six months.
Insurance protects you financially from any adverse consequences, for instance income insurance in case you lose your job, medical insurance for unplanned medical expenses, and vehicle insurance in case your car is stolen. While it’s not necessarily a good idea to get every type of insurance available, it’s unquestionably a smart idea to review your individual circumstances to see which is best suited to you. For example, medical insurance is strongly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unplanned incident may lead to considerable damage to your financial situation.
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, consider investing this money in a high-interest term deposit. After you’ve got more money saved, think about buying some property, or investing in gold. The key to a well-founded investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.
Get financial help as soon as possible
If, for whatever reason, you’ve found yourself in financial turmoil, the best advice is to seek financial assistance immediately. Too many individuals wrestle with financial complications for many 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 assistance with your financial position, speak with the professionals at Bankruptcy Experts Bunbury on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertsbunbury.com.au