There’s no question that your 20’s is a very important period 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 started a career, a university degree, or spent time traveling to other countries and gaining life experience, your 20’s is a vital decade from both a personal and financial context. Whatever path you decide upon, the one constant that will continually remain in your life is money.
The point of the matter is, the earlier you start saving money and building wealth, the better your financial prospects will be in the future. Regardless of whether you choose to get married, start a family, or secure a house, there are specific financial goals that every person in their 20’s should strive to accomplish to secure a better a future. In this article, we’ll be taking a closer look at these goals and how you can begin constructing healthy financial habits.
Establish a budget
Developing healthy financial habits begins with learning 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 sticking to it! With a paper and pen, document your monthly income and costs. Investigate your expenses to see which can be cut down, or which can be eliminated completely. A few ways to reduce your expenses are choosing to eat at home as opposed to eating in restaurants and switching your Cable television subscription to streaming services like Netflix instead.
Eradicate your debts
Whether or not you’ve travelled overseas or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so repaying your debts by cutting spendings or working a 2nd 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 for example, which will place you in a substantially better financial position than merely making the minimal monthly repayments on your debts.
Develop an emergency fund
Life rarely works out the way you planned, so it is essential to be prepared for any sudden changes that might be necessitated. You may find yourself unemployed, or in an unfortunate incident that inhibits 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 advise that all folks should have a dedicated emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any undesirable consequences, for example income insurance should you lose your job, health insurance for unpredictable medical expenses, and vehicle insurance in the event that your car is stolen. Although it’s not always wise to get every type of insurance available, it’s undeniably a wise idea to review your individual situation to see which is best suited to you. For instance, health insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unplanned incident may cause 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 at 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 sensible investment portfolio is ‘diversification’, meaning that you handle the risks of investment by putting your eggs in different baskets, so to say.
Seek financial assistance immediately
If, for whatever reason, you’ve found yourself in financial distress, the best advice is to seek financial help as soon as possible. Lots of folks wrestle with financial troubles for years before finding help, which puts them in a worse position as their debts will only compound over time. The sooner you seek financial advice, the more options are available to you, so if you require any help with your financial position, talk with the professionals at Bankruptcy Experts Gympie on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsgympie.com.au