There’s no question that your 20’s is a very important phase of your life. There’s an anxious but gratifying feeling about becoming an adult, leaving home, and being financially self-reliant. Regardless of whether you started a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is a vital decade from both a personal and financial perspective. Regardless of what path you decide upon, the one constant that will consistently remain in your life is money.
The point of the matter is, the sooner you begin saving money and building 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 various financial goals that every person in their 20’s should endeavour to achieve to secure a better a future. In this blog, we’ll be taking a closer look at these targets and how you can start building healthy financial habits.
Set up a budget
Constructing 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 putting together a budget and sticking to it! With a pen and paper, write down your monthly income and expenditures. Study your expenditures to see which can be lowered, or which can be cut out entirely. A few ways to cut your expenses are opting to eat at home rather than eating in restaurants and replacing your Cable subscription to streaming services like Amazon instead.
Remove your debts
Whether or not you’ve travelled the world or have student loan debts, the faster you repay these debts, the better. Interest compounds as time passes, so paying off your debts by cutting expenses 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 example, which will place you in a substantially better financial position than simply making the minimum monthly repayments on your debts.
Set up an emergency fund
Life seldom works out the way you planned, so it’s important to be prepared for any unexpected adjustments that may be required. You might end up out of work, or in an incident that stops you from working, so having an emergency fund will be able to give you some breathing space when you need it the most. Financial advisors propose that all individuals should have a devoted emergency fund that can support 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, medical insurance for unanticipated medical expenses, and vehicle insurance in the event that your car is stolen. Though it’s not necessarily sensible to get every type of insurance available, it’s undoubtedly a clever idea to analyse your individual situation to see which is best suited to you. For example, health insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unplanned incident may lead to significant 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, consider investing this money in a high-interest term deposit. Once you’ve got more money saved, contemplate purchasing a 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 assistance immediately
If, for whatever reason, you’ve found yourself in financial distress, the best advice is to seek financial assistance immediately. Lots of folks struggle with financial complications for years before finding help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial guidance, the more options are available to you, so if you need any guidance with your financial situation, reach out to the specialists at Bankruptcy Experts Whitsundays on 1300 795 575, or visit our website for more information: Bankrupt Whitsundays