There’s no question that your 20’s is a very cherished phase of your life. There’s a jittery but exciting feeling about becoming an adult, leaving home, and being financially independent. Regardless if you started a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is an important decade from both a personal and financial point of view. Whatever path you decide upon, the one constant that will constantly remain in your life is money.
The truth of the matter is, the sooner you begin saving money and generating wealth, the better your financial scenario will be in the future. Regardless of whether you choose to get married, start a family, or buy a home, there are a number of financial objectives that every person in their 20’s should endeavour to reach to secure a better a future. In this blog, we’ll be taking a closer look at these targets and how you can start developing healthy financial habits.
Construct a budget
Developing healthy financial habits starts 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 finances by putting together a budget and following it! With a paper and pen, document your monthly income and costs. Examine your expenditures to uncover which can be cut down, or which can be removed entirely. Some ways to cut down your expenses are choosing to eat at home rather than eating in restaurants and replacing your Cable subscription to streaming services like Amazon instead.
Remove your debts
Whether or not you’ve travelled the world or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so repaying your debts by reducing expenditures or working a 2nd 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 example, which will put you in a far better financial position than only 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 unexpected changes that may be needed. You might end up out of a job, or in an unfortunate incident that hinders 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 advise that all people 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 in the event you lose your job, health insurance for unpredictable medical expenses, and vehicle insurance in the event that your car is stolen. Even though it’s not necessarily advisable to get every form of insurance available, it’s undoubtedly a smart idea to analyse your individual circumstances to see which is best suited to you. For instance, health insurance is strongly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may result in substantial damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed 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. After you’ve got more money saved, contemplate purchasing some property, or investing in gold. The key to a sensible investment portfolio is ‘diversification’, meaning that you deal with the risks of investment by putting your eggs in different baskets, so to say.
Get financial help immediately
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial help immediately. Lots of individuals battle with financial problems for several years before getting help, which puts them in a worse position as their debts will only compound as time passes. The sooner you seek financial guidance, the more options are available to you, so if you need any support with your financial position, get in touch with the specialists at Bankruptcy Experts Hervey Bay on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertsherveybay.com.au