There’s no question that your 20’s is a very unique stage of your life. There’s a jittery but exhilarating sensation about becoming an adult, leaving home, and being financially self-reliant. Whether you launched a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is an important decade from both a personal and financial viewpoint. No matter what path you go with, the one constant that will constantly remain in your life is money.
The point of the matter is, the sooner you begin saving money and generating wealth, the better your financial condition will be in the upcoming years. Regardless of whether you wish to get married, start a family, or invest in a home, there are particular financial aspirations that every individual in their 20’s should try to accomplish in order 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.
Set up a budget
Building healthy financial habits starts 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 finances by forming a budget and sticking to it! With a paper and pen, write down your monthly income and expenses. Examine your expenditures to find out which can be cut down, or which can be cut out entirely. A few ways to reduce your expenses are electing to eat at home in lieu of eating in restaurants and changing your Cable TV subscription to streaming services like Netflix instead.
Get rid of your debts
Regardless if you’ve travelled the globe or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so repaying your debts by slashing expenses or working a second job can save you thousands of dollars in only a number of years. These savings can then be invested in a high-interest term deposit as an example, which will place you in a much better financial position than just making the minimal 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 could 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 room when you need it the most. Financial specialists strongly recommend that all individuals should have a devoted emergency fund that is capable of supporting 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, health insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. While it’s not always beneficial to get every type of insurance available, it’s certainly a clever idea to analyse your individual circumstances to see which is best suited to you. For instance, medical insurance is highly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may lead to significant damage to your financial position.
Invest in a diversified portfolio
If you’ve managed to save a particular 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, think about purchasing some property, or investing in gold. The key to a good investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.
Seek financial assistance as soon as possible
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial help as soon as possible. A lot of folks battle with financial troubles for many years before getting help, which puts them in a worse position as their debts will only compound over time. The sooner you seek financial guidance, the more options are available to you, so if you require any guidance with your financial situation, get in contact with the specialists at Bankruptcy Experts Maitland on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsmaitland.com.au