There’s no question that your 20’s is a very important period of your life. There’s an anxious but exciting feeling about becoming an adult, moving out of home, and being financially independent. Regardless of whether you launched a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a valuable decade from both a personal and financial perspective. Whichever path you decide upon, the one constant that will consistently remain in your life is money.
The reality of the matter is, the earlier you begin saving money and building wealth, the better your financial prospects will be in the long term. Regardless of whether you intend to get married, start a family, or invest in a property, there are specific financial aspirations that every individual in their 20’s should attempt to reach in order to secure a better a future. In this blog, we’ll be taking a closer look at these objectives and how you can begin building healthy financial habits.
Set up a budget
Building healthy financial habits starts 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 constructing a budget and sticking to it! With a paper and pen, document your monthly income and expenditures. Explore your expenditures to find out which can be decreased, or which can be eliminated totally. A few ways to lessen your expenditures are electing to eat at home rather than eating out and switching your Cable TV subscription to streaming services like Netflix instead.
Get rid of your debts
Whether you’ve travelled the world or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so paying off your debts by reducing expenses or working a second job may save you thousands of dollars in only a few years. These savings can then be invested in a high-interest term deposit for example, which will place you in a significantly 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 vital to be prepared for any unforeseen adjustments that may be needed. You might end up unemployed, or in an incident that stops you from working, so having an emergency fund will be able to give you a bit of breathing room when you need it the most. Financial experts propose 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 detrimental consequences, for instance income insurance should you lose your job, medical insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not necessarily appropriate to get every kind of insurance available, it’s undoubtedly a clever idea to evaluate your individual situation to see which is best suited to you. For instance, health insurance is highly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may lead to significant damage to your financial position.
Invest in a diversified portfolio
If you’ve managed to save a certain 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, think about buying some 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 hardship, the best advice is to seek financial help as soon as possible. A lot of people wrestle with financial issues for several years before getting help, which puts them in a worse position as their debts will only compound with time. The sooner you get financial advice, the more options are available to you, so if you need any support with your financial situation, reach out to the specialists at Bankruptcy Experts Wangaratta on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertswangaratta.com.au