There’s no question that your 20’s is a very precious phase of your life. There’s a nervous but gratifying feeling about becoming an adult, moving out of home, and being financially independent. Regardless of whether you began a career, a university degree, or spent time traveling in foreign countries and gaining life experience, your 20’s is a valuable decade from both a personal and financial perspective. Regardless of what path you choose, the one constant that will constantly remain in your life is money.
The fact of the matter is, the earlier you begin saving money and building wealth, the better your financial condition will be in the long term. Regardless of whether you wish to get married, start a family, or buy a home, there are specific financial objectives that every individual in their 20’s should try to achieve to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can start building healthy financial habits.
Put together a budget
Constructing healthy financial habits starts with learning 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 putting together a budget and following it! With a pen and paper, write down your monthly income and expenditures. Investigate your expenditures to find out which can be reduced, or which can be cut out altogether. Some ways to cut down your expenses are choosing to eat at home in lieu of eating in restaurants and replacing your Cable television subscription to streaming services like Amazon instead.
Remove your debts
Whether or not you’ve travelled abroad or have student loan debts, the faster you repay these debts, the better. Interest compounds as time passes, so repaying your debts by cutting expenditures or working a 2nd job could save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit for instance, which will put you in a far better financial position than merely making the minimal monthly repayments on your debts.
Build an emergency fund
Life almost never works out the way you planned, so it’s important to be prepared for any unanticipated adjustments that may be needed. You might 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 a bit of breathing room when you need it the most. Financial specialists highly recommend that all people should have a devoted emergency fund that is capable of supporting their living expenses for three to six months.
Insurance protects you financially from any adversarial consequences, for instance income insurance in case you lose your job, medical insurance for unexpected medical expenses, and vehicle insurance in case your car is stolen. While it’s not always wise to get every form of insurance available, it’s definitely a clever idea to analyse your individual circumstances to see which is best suited to you. For example, medical insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unexpected incident may result in serious damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed to save a particular amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. After you’ve got more money saved, think about purchasing some property, or investing in gold. The key to a good 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 help as soon as possible
If, for whatever reason, you’ve found yourself in financial turmoil, the best advice is to seek financial help immediately. A lot of individuals struggle with financial troubles for years before seeking help, which puts them in a worse position as their debts will only compound as time passes. The sooner you get financial assistance, the more options are available to you, so if you require any assistance with your financial condition, get in contact with the professionals at Bankruptcy Experts Port Macquarie on 1300 795 575, or visit our website for further information: www.bankruptcyexpertsportmacquarie.com.au