There’s no doubt that your 20’s is a very cherished period of your life. There’s an anxious but fulfilling sensation about becoming an adult, leaving home, and being financially self-reliant. Regardless if you started a career, a university degree, or spent time traveling the globe and gaining life experience, your 20’s is an important decade from both a personal and financial perspective. Whatever path you choose, the one constant that will consistently remain in your life is money.
The reality of the matter is, the sooner you begin saving money and building wealth, the better your financial scenario will be in the long term. Regardless of whether you want to get married, start a family, or invest in a house, there are certain financial objectives 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 targets and how you can begin developing healthy financial habits.
Establish a budget
Establishing 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 making a budget and sticking to it! With a pen and paper, jot down your monthly income and expenses. Analyse your expenses to find out which can be lowered, or which can be cut out totally. A few ways to reduce your expenditures are choosing to eat at home instead of eating in restaurants and changing your Cable TV subscription to streaming services like Amazon instead.
Eliminate your debts
Whether you’ve traveled the world or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so paying off your debts by cutting down expenditures or working a second job might save you thousands of dollars in only a few years. These savings can then be invested in a high-interest term deposit for instance, which will place you in a substantially better financial position than only making the minimum monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so it is vital to be prepared for any unexpected adjustments that may be needed. You might end up out of a job, 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 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 should you lose your job, health insurance for sudden medical expenses, and vehicle insurance in case your car is stolen. Even though it’s not necessarily appropriate to get every kind of insurance available, it’s undeniably a smart idea to analyse your individual circumstances to see which is best suited to you. For instance, medical insurance is strongly recommended for everyone due to the inflated costs of uninsured medical treatment. Without insurance, an unanticipated incident may cause 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, think about investing this money in a high-interest term deposit. When you’ve got more money saved, think about purchasing a property, or investing in gold. The key to a good 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 as soon as possible
If, for whatever reason, you’ve found yourself in financial hardship, the best advice is to seek financial assistance immediately. A lot of individuals struggle with financial problems for years before finding help, which puts them in a worse position as their debts will only compound as time passes. The sooner you get financial advice, the more options are available to you, so if you require any guidance with your financial condition, speak with the professionals at Bankruptcy Experts Northern Rivers on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsnorthernrivers.com.au