There’s no doubt that your 20’s is a very unique phase of your life. There’s a timid but exciting feeling about becoming an adult, moving out of home, and being financially independent. Regardless if you started a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a critical decade from both a personal and financial context. No matter what path you decide upon, the one constant that will continually remain in your life is money.
The fact of the matter is, the earlier you start saving money and generating wealth, the better your financial condition will be in the long term. Regardless of whether you plan to get married, start a family, or invest in a home, there are certain financial targets that every person in their 20’s should strive to achieve to secure a better a future. In this blog, we’ll be taking a closer look at these objectives and how you can start creating healthy financial habits.
Put together a budget
Developing healthy financial habits begins with understanding 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 forming a budget and sticking to it! With a paper and pen, write down your monthly income and expenditures. Study your expenditures to see which can be reduced, or which can be cut out altogether. A few ways to cut your expenditures are electing to eat at home rather than eating in restaurants and transferring your Cable subscription to streaming services like Amazon instead.
Eliminate your debts
Whether or not you’ve travelled abroad or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so repaying your debts by cutting down expenditures or working a 2nd job could save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit for instance, which will put you in a considerably better financial position than merely making the minimum monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so it is crucial to be prepared for any unanticipated adjustments that might be needed. You may end up out of work, or in an accident that stops 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 strongly recommend that all folks should have a dedicated emergency fund that is capable of supporting their living expenses for three to six months.
Insurance protects you financially from any damaging consequences, for instance income insurance in case you lose your job, health insurance for sudden medical expenses, and vehicle insurance in case your car is stolen. Even though it’s not always recommended to get every type of insurance available, it’s definitely a clever idea to examine your individual situation to see which is best suited to you. For instance, health insurance is strongly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unanticipated incident may lead to considerable 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, consider 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 help as soon as possible
If, for whatever reason, you’ve ended up in financial turmoil, the best advice is to seek financial help immediately. Too many folks struggle with financial problems for several years before getting 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 need any support with your financial situation, speak with the professionals at Bankruptcy Experts Ipswich on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsipswich.com.au