|March 23, 2018||0|
There’s no doubt that your 20’s is a very precious period of your life. There’s a nervous but exhilarating feeling about becoming an adult, leaving home, and being financially independent. Whether you kicked off a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a meaningful decade from both a personal and financial point of view. Regardless of what path you go with, 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 developing wealth, the better your financial scenario will be in the long term. Regardless of whether you intend to get married, start a family, or purchase a house, there are various financial aspirations that every individual in their 20’s should endeavour to accomplish 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.
Establish a budget
Constructing healthy financial habits starts 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 finances by creating a budget and sticking to it! With a pen and paper, document your monthly income and costs. Analyse your expenditures to uncover which can be cut down, or which can be eliminated altogether. Some ways to lessen your expenditures are electing to eat at home in lieu of eating out and transferring your Cable subscription to streaming services like Amazon instead.
Get rid of your debts
Whether you’ve travelled the globe or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so paying off your debts by reducing expenditures or working a second job can save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit for example, which will put you in a substantially better financial position than merely making the minimal monthly repayments on your debts.
Create an emergency fund
Life almost never works out the way you planned, so it is vital to be prepared for any abrupt adjustments that might be necessitated. You may find yourself out of a job, or in an accident that hinders you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial experts highly recommend that all folks should have a dedicated emergency fund that can support their living expenses for three to six months.
Insurance protects you financially from any detrimental consequences, for example income insurance in the event you lose your job, medical insurance for unpredictable medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not always a good idea to get every form of insurance available, it’s undeniably a wise idea to analyse your individual circumstances to see which is best suited to you. For example, medical insurance is recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause significant 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 at investing this money in a high-interest term deposit. After you’ve got more money saved, contemplate 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 help immediately
If, for whatever reason, you’ve found yourself in financial trouble, the best advice is to seek financial help as soon as possible. A lot of individuals wrestle with financial troubles for several years before seeking 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 require any help with your financial situation, speak with the professionals at Bankruptcy Emerald on 1300 818 575, or visit our website for further information: http://www.bankruptcy-emerald.com.au/