There’s no doubt that your 20’s is a very unique period of your life. There’s a nervous but fulfilling sensation about becoming an adult, leaving home, and being financially self-reliant. Whether or not you kicked off a career, a university degree, or spent time traveling to other countries and gaining life experience, your 20’s is a valuable decade from both a personal and financial context. No matter what path you decide upon, the one constant that will always remain in your life is money.
The point of the matter is, the sooner you start saving money and building wealth, the better your financial prospects will be in the years to come. Regardless of whether you intend to get married, start a family, or invest in a house, there are a number of financial aspirations that every individual in their 20’s should strive to reach in order to secure a better a future. In this article, we’ll be taking a closer look at these targets and how you can begin building healthy financial habits.
Set up a budget
Creating healthy financial habits begins with discovering 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 setting up a budget and sticking to it! With a paper and pen, write down your monthly income and costs. Study your expenditures to find out which can be cut down, or which can be cut out totally. A few ways to cut down your expenses are opting to eat at home instead of eating out and changing your Cable TV subscription to streaming services like Netflix instead.
Get rid of your debts
Whether 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 down spendings or working a 2nd job might 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 put you in a far 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 itis imperative to be prepared for any unanticipated adjustments that might be needed. You could find yourself unemployed, 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 advisors recommend that all people should have a dedicated emergency fund that is capable of supporting their living expenses for 3 to 6 months.
Insurance protects you financially from any adverse consequences, for example income insurance in the event you lose your job, health insurance for unpredictable medical expenses, and vehicle insurance in case your car is stolen. Even though it’s not necessarily advisable to get every kind of insurance available, it’s most certainly a wise idea to review your individual circumstances to see which is best suited to you. For instance, health insurance is recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may lead to significant damage to your financial situation.
Invest in a diversified portfolio
If you’ve been able to save a specific amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. After you’ve got more money saved, contemplate buying some property, or investing in gold. The key to a sensible 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 help immediately. Lots of individuals struggle with financial complications for many 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 guidance with your financial position, speak with the professionals at Bankruptcy Experts Lismore on 1300 795 575, or visit our website for more information: www.bankruptcyexpertslismore.com.au