There’s no question that your 20’s is a very enjoyable stage of your life. There’s a timid but exciting sensation about becoming an adult, moving out of home, and being financially independent. Regardless if you kicked off a career, a university degree, or spent time traveling in foreign countries 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 always 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 scenario will be in the years to come. Regardless of whether you intend to get married, start a family, or buy a house, there are a number of financial targets that every individual in their 20’s should try to reach in order 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.
Set up a budget
Building healthy financial habits begins 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 finances by putting together a budget and following it! With a paper and pen, document your monthly income and expenses. Analyse your expenditures to find out which can be lowered, or which can be cut out altogether. Some ways to lessen your expenses are electing to eat at home as opposed to eating in restaurants and switching your Cable TV subscription to streaming services like Amazon instead.
Get rid of your debts
Whether you’ve travelled abroad or have student loan debts, the faster you repay these debts, the better. Interest compounds with time, so repaying your debts by cutting spendings 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 example, which will put you in a far better financial position than only making the minimal monthly repayments on your debts.
Establish an emergency fund
Life rarely works out the way you planned, so it is essential to be prepared for any unforeseen adjustments that may be required. You may end up out of a job, or in an unfortunate incident that stops you from working, so having an emergency fund will be able to give you some breathing room when you need it the most. Financial specialists highly recommend 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 damaging consequences, for instance income insurance in the event you lose your job, health insurance for unexpected medical expenses, and vehicle insurance in the event your car is stolen. Although it’s not necessarily sensible to get every type of insurance available, it’s certainly a wise idea to review your individual circumstances to see which is best suited to you. For example, medical insurance is strongly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may result in substantial damage to your financial position.
Invest in a diversified portfolio
If you’ve been able 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. Once you’ve got more money saved, contemplate purchasing a property, or investing in gold. The key to a sensible investment portfolio is ‘diversification’, meaning that you manage 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 distress, the best advice is to seek financial assistance immediately. Lots 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 seek financial assistance, the more options are available to you, so if you require any assistance with your financial condition, talk to the professionals at Bankruptcy Experts Kalgoorlie on 1300 795 575, or visit our website for more information: Bankruptcy Kalgoorlie