There’s no doubt that your 20’s is a very enjoyable phase of your life. There’s a timid but gratifying feeling about becoming an adult, leaving home, and being financially independent. Regardless of whether you launched a career, a university degree, or spent time traveling the world and gaining life experience, your 20’s is a critical decade from both a personal and financial context. Whichever path you decide upon, the one constant that will consistently remain in your life is money.
The fact of the matter is, the sooner you start saving money and generating wealth, the better your financial scenario will be in the upcoming years. Regardless of whether you want to get married, start a family, or invest in a house, there are specific financial targets that every person in their 20’s should endeavour to accomplish to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can start building healthy financial habits.
Make a budget
Developing healthy financial habits starts with knowing 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 making a budget and sticking to it! With a paper and pen, write down your monthly income and costs. Review your expenditures to find out which can be lowered, or which can be removed altogether. Some ways to cut your expenditures are electing to eat at home instead of eating out and swapping your Cable TV subscription to streaming services like Amazon instead.
Get rid of your debts
Regardless if you’ve travelled overseas or have student loan debts, the faster you repay these debts, the better. Interest compounds with time, so paying off your debts by cutting expenses or working a 2nd job could save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit for example, which will place you in a considerably better financial position than just making the minimal monthly repayments on your debts.
Develop an emergency fund
Life rarely works out the way you planned, so it’s important to be prepared for any unanticipated adjustments that may be needed. You may end up out of work, or in an incident that prevents 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 recommend that all folks should have a devoted emergency fund that can support their living expenses for three to six months.
Insurance protects you financially from any adverse consequences, for instance income insurance should you lose your job, medical insurance for unanticipated medical expenses, and vehicle insurance in case your car is stolen. Though it’s not necessarily advisable to get every form of insurance available, it’s undeniably a clever idea to examine your individual situation to see which is best suited to you. For example, health insurance is strongly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unplanned incident may lead to significant damage to your financial position.
Invest in a diversified portfolio
If you’ve been able 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. When you’ve got more money saved, contemplate buying some property, or investing in gold. The key to a sound investment portfolio is ‘diversification’, meaning that you handle 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 distress, the best advice is to seek financial help immediately. Too many folks struggle with financial issues for several years before getting help, which puts them in a worse position as their debts will only compound over time. The sooner you seek financial assistance, the more options are available to you, so if you require any guidance with your financial condition, talk to the professionals at Bankruptcy Experts Alice Springs on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsalicesprings.com.au