There’s no question that your 20’s is a very unique period of your life. There’s a nervous but fulfilling sensation about becoming an adult, moving out of home, and being financially independent. Whether or not you launched a career, a university degree, or spent time traveling the world and gaining life experience, your 20’s is a valuable decade from both a personal and financial point of view. Regardless of what path you go with, the one constant that will always remain in your life is money.
The point of the matter is, the earlier you start saving money and generating wealth, the better your financial prospects will be in the future. Regardless of whether you want to get married, start a family, or purchase a property, there are a number of financial targets that every individual in their 20’s should try to achieve 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 begin constructing healthy financial habits.
Make a budget
Constructing healthy financial habits begins 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 creating a budget and following it! With a paper and pen, document your monthly income and expenditures. Analyse your expenditures to find out which can be reduced, or which can be eliminated completely. Some ways to cut down your expenditures are opting to eat at home instead of eating out and swapping your Cable subscription to streaming services like Amazon instead.
Remove your debts
Regardless of whether 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 can save you thousands of dollars in only a few 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 merely making the minimal monthly repayments on your debts.
Set up an emergency fund
Life rarely works out the way you planned, so it is essential to be prepared for any abrupt changes that might be needed. You may end up out of a job, or in an incident that prevents you from working, so having an emergency fund will be able to give you some breathing space 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 3 to 6 months.
Insurance protects you financially from any adversarial consequences, for example income insurance should you lose your job, medical insurance for unanticipated medical expenses, and vehicle insurance in case your car is stolen. Even though it’s not necessarily sensible to get every type of insurance available, it’s unquestionably a clever idea to examine your individual circumstances to see which is best suited to you. For example, medical insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unanticipated incident may lead to considerable damage to your financial position.
Invest in a diversified portfolio
If you’ve managed to save a specific amount of money that is otherwise sitting idle in the bank, look at investing this money in a high-interest term deposit. When you’ve got more money saved, contemplate purchasing a property, or investing in gold. The key to a sensible investment portfolio is ‘diversification’, meaning that you regulate the risks of investment by putting your eggs in different baskets, so to say.
Seek financial assistance immediately
If, for whatever reason, you’ve ended up in financial trouble, the best advice is to seek financial assistance immediately. Too many people battle with financial problems for years before finding help, which puts them in a worse position as their debts will only compound over time. The sooner you get financial guidance, the more options are available to you, so if you need any help with your financial position, speak with the professionals at Bankruptcy Experts Fremantle on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsfremantle.com.au