There’s no doubt that your 20’s is a very cherished period of your life. There’s an anxious but exciting sensation about becoming an adult, leaving home, and being financially self-reliant. Regardless if you kicked off a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is a valuable decade from both a personal and financial context. No matter what path you go with, the one constant that will consistently remain in your life is money.
The reality of the matter is, the sooner you begin saving money and developing wealth, the better your financial condition will be in the future. Regardless of whether you want to get married, start a family, or invest in a property, there are a number of financial targets that every person in their 20’s should strive to accomplish so as to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can start creating healthy financial habits.
Put together a budget
Building healthy financial habits starts with learning how to budget. Being able to spend less money than you earn is the key to saving money, so start taking control of your finances by establishing a budget and sticking to it! With a pen and paper, document your monthly income and expenses. Analyse your expenditures to see which can be lowered, or which can be removed altogether. A few ways to lessen your expenditures are choosing to eat at home as opposed to eating out and changing your Cable TV subscription to streaming services like Netflix instead.
Eradicate your debts
Regardless if you’ve travelled abroad or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so repaying your debts by reducing expenses or working a second job could 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 place you in a considerably better financial position than just making the minimum monthly repayments on your debts.
Start an emergency fund
Life hardly ever works out the way you planned, so it is very important to be prepared for any unforeseen adjustments that might be needed. You may find yourself out of a job, or in an unfortunate incident that inhibits you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial specialists recommend 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 damaging consequences, for instance income insurance should you lose your job, health insurance for unplanned medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not necessarily a good idea to get every type of insurance available, it’s undoubtedly a clever idea to evaluate your individual situation to see which is best suited to you. For instance, medical insurance is highly recommended for everyone due to the inflated costs of uninsured medical treatment. Without insurance, an unplanned incident may cause substantial damage to your financial position.
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, think about investing this money in a high-interest term deposit. After you’ve got more money saved, contemplate purchasing some property, or investing in gold. The key to a sound investment portfolio is ‘diversification’, meaning that you regulate the risks of investment by putting your eggs in different baskets, so to say.
Seek financial help as soon as possible
If, for whatever reason, you’ve ended up in financial trouble, the best advice is to seek financial assistance immediately. A lot of people battle with financial complications for several 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 require any guidance with your financial situation, speak with the professionals at Bankruptcy Experts Toowoomba on 1300 795 575, or visit our website for additional information: Bankrupt Toowoomba