There’s no question that your 20’s is a very precious stage of your life. There’s a nervous but fulfilling sensation about becoming an adult, moving out of home, and being financially self-reliant. Whether you launched 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 point of view. No matter what path you choose, the one constant that will continually remain in your life is money.
The fact of the matter is, the earlier you begin saving money and creating wealth, the better your financial prospects will be in the future. Regardless of whether you intend to get married, start a family, or purchase a home, there are specific financial aspirations that every person in their 20’s should try to reach to secure a better a future. In this article, we’ll be taking a closer look at these goals and how you can begin building healthy financial habits.
Set up a budget
Creating healthy financial habits starts 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 putting together a budget and following it! With a pen and paper, write down your monthly income and expenditures. Examine your expenditures to see which can be cut down, or which can be removed entirely. Some ways to reduce your expenditures are opting to eat at home as opposed to eating out and switching your Cable subscription to streaming services like Netflix instead.
Eradicate your debts
Regardless of whether you’ve travelled abroad or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so paying off your debts by reducing expenditures or working a second 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 instance, which will put you in a considerably better financial position than merely making the minimum monthly repayments on your debts.
Start an emergency fund
Life almost never works out the way you planned, so it is essential to be prepared for any unanticipated changes that might be necessitated. You could find yourself out of work, or in an accident that hinders you from working, so having an emergency fund will be able to give you some breathing space when you need it the most. Financial specialists propose that all individuals should have a dedicated emergency fund that can support their living expenses for three to six months.
Insurance protects you financially from any detrimental consequences, for example income insurance in the event you lose your job, medical insurance for unanticipated medical expenses, and vehicle insurance in case your car is stolen. Although it’s not necessarily recommended to get every form of insurance available, it’s most certainly a clever idea to evaluate your individual situation to see which is best suited to you. For example, health insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unanticipated incident may lead to considerable damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed to save a specific amount of money that is otherwise sitting idle in the bank, think about investing this money in a high-interest term deposit. Once you’ve got more money saved, consider purchasing a property, or investing in gold. The key to a well-founded investment portfolio is ‘diversification’, meaning that you deal with the risks of investment by putting your eggs in different baskets, so to say.
Get financial assistance as soon as possible
If, for whatever reason, you’ve found yourself in financial trouble, the best advice is to seek financial help immediately. A lot of individuals struggle with financial troubles for 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 guidance, the more options are available to you, so if you need any help with your financial position, speak to the professionals at Bankruptcy Experts Brisbane on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsbrisbane.com.au