There’s no doubt that your 20’s is a very special phase of your life. There’s an anxious but gratifying feeling about becoming an adult, leaving home, and being financially independent. Regardless of whether you started a career, a university degree, or spent time traveling the globe and gaining life experience, your 20’s is a significant decade from both a personal and financial viewpoint. Whichever path you choose, the one constant that will constantly remain in your life is money.
The truth of the matter is, the earlier you start saving money and developing wealth, the better your financial scenario will be in the upcoming years. Regardless of whether you want to get married, start a family, or purchase a home, there are certain financial goals that every person in their 20’s should attempt 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 constructing 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 money by constructing a budget and sticking to it! With a pen and paper, list your monthly income and expenses. Explore your expenditures to uncover which can be cut down, or which can be removed entirely. A few ways to lessen your expenditures are electing to eat at home rather than eating in restaurants and swapping your Cable TV subscription to streaming services like Amazon instead.
Eradicate your debts
Regardless if you’ve travelled abroad 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 down expenses or working a second job can 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 put you in a much better financial position than just making the minimal monthly repayments on your debts.
Establish an emergency fund
Life seldom works out the way you planned, so it is vital to be prepared for any unanticipated adjustments that might be necessitated. You may end up out of a job, or in an accident 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 recommend that all people should have a devoted emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any detrimental 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 always a good idea to get every form of insurance available, it’s most certainly a smart idea to review your individual circumstances to see which is best suited to you. For example, medical insurance is recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unanticipated incident may lead to substantial damage to your financial situation.
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, consider 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 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 assistance as soon as possible
If, for whatever reason, you’ve ended up in financial distress, the best advice is to seek financial assistance immediately. A lot of people battle with financial complications for many years before finding help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial assistance, the more options are available to you, so if you require any help with your financial situation, talk to the specialists at Bankruptcy Experts Dandenong on 1300 795 575, or visit our website for more information: Bankruptcy Dandenong