There’s no question that your 20’s is a very cherished stage of your life. There’s an anxious but exhilarating sensation about becoming an adult, moving out of home, and being financially self-reliant. Regardless if you launched a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a momentous decade from both a personal and financial point of view. Regardless of what path you choose, the one constant that will continually remain in your life is money.
The point of the matter is, the earlier you begin saving money and developing wealth, the better your financial condition will be in the upcoming years. Regardless of whether you choose to get married, start a family, or invest in a house, there are particular financial aspirations that every person in their 20’s should endeavour to accomplish to secure a better a future. In this blog, we’ll be taking a closer look at these objectives and how you can start building healthy financial habits.
Set up a budget
Creating healthy financial habits starts with discovering how to budget. Being able to spend less money than you make is the key to saving money, so start taking control of your money by putting together a budget and following it! With a pen and paper, write down your monthly income and expenditures. Review your expenditures to find out which can be cut down, or which can be eliminated entirely. A few ways to reduce your expenses are opting to eat at home as opposed to eating in restaurants and switching your Cable television subscription to streaming services like Amazon instead.
Eliminate your debts
Whether you’ve travelled the globe or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so repaying 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 as an example, which will place you in a substantially better financial position than only making the minimal monthly repayments on your debts.
Start an emergency fund
Life rarely works out the way you planned, so it is essential to be prepared for any unforeseen changes that might be needed. You could end up unemployed, or in an incident that hinders you from working, so having an emergency fund will be able to give you a bit of breathing space when you need it the most. Financial advisors propose that all individuals should have a dedicated emergency fund that is capable of supporting their living expenses for 3 to 6 months.
Insurance protects you financially from any adverse consequences, for instance income insurance in case you lose your job, health insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not always advisable to get every form of insurance available, it’s undoubtedly a wise idea to examine your individual situation to see which is best suited to you. For instance, medical insurance is highly recommended for everyone 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 been able to save a specific amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. When you’ve got more money saved, contemplate buying a property, or investing in gold. The key to a sensible 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 as soon as possible
If, for whatever reason, you’ve found yourself in financial hardship, the best advice is to seek financial assistance immediately. Lots of individuals struggle 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 need any guidance with your financial situation, speak with the professionals at Bankruptcy Australia on 1300 795 575, or visit our website for additional information: www.bankruptcy-australia.net.au