There’s no question that your 20’s is a very memorable period of your life. There’s an anxious but gratifying feeling about becoming an adult, moving out of home, and being financially independent. Regardless of whether you kicked off a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a crucial decade from both a personal and financial viewpoint. Regardless of what path you decide upon, the one constant that will always remain in your life is money.
The reality 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 various financial aspirations that every person in their 20’s should endeavour to accomplish in order to secure a better a future. In this article, we’ll be taking a closer look at these targets and how you can begin constructing healthy financial habits.
Set up a budget
Building healthy financial habits begins with understanding how to budget. Being able to spend less money than you earn is the key to saving money, so start taking control of your money by constructing a budget and sticking to it! With a pen and paper, document your monthly income and expenditures. Look over your expenditures to uncover which can be reduced, or which can be cut out completely. Some ways to cut down your expenses are opting to eat at home as opposed to eating out and replacing your Cable television subscription to streaming services like Netflix instead.
Eliminate 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 down spendings 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 put you in a substantially better financial position than merely making the minimum monthly repayments on your debts.
Develop an emergency fund
Life almost never works out the way you planned, so itis imperative to be prepared for any abrupt changes that might be needed. You might end up out of a job, or in an accident that inhibits 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 individuals 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 undesirable consequences, for example income insurance in case you lose your job, health insurance for unexpected medical expenses, and vehicle insurance in the event your car is stolen. While it’s not necessarily a good idea to get every kind of insurance available, it’s undoubtedly a smart idea to review your individual circumstances to see which is best suited to you. For instance, health insurance is recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unplanned incident may cause serious 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, consider buying some property, or investing in gold. The key to a solid investment portfolio is ‘diversification’, meaning that you deal with 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 hardship, the best advice is to seek financial assistance immediately. Lots of individuals struggle with financial issues for several years before finding 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 assistance with your financial situation, talk to the specialists at Bankruptcy Experts Hobart on 1300 795 575, or visit our website for further information: www.bankruptcyexpertshobart.com.au