There’s no doubt that your 20’s is a very enjoyable period of your life. There’s a nervous but exhilarating sensation about becoming an adult, moving out of home, and being financially self-reliant. Regardless if you launched a career, a university degree, or spent time traveling to other countries and gaining life experience, your 20’s is an important decade from both a personal and financial viewpoint. Whichever path you choose, the one constant that will constantly remain in your life is money.
The reality of the matter is, the earlier you begin saving money and creating wealth, the better your financial prospects will be in the long term. Regardless of whether you want to get married, start a family, or invest in a home, there are various financial aspirations that every person in their 20’s should strive to reach in order to secure a better a future. In this blog, we’ll be taking a closer look at these targets and how you can start building healthy financial habits.
Construct a budget
Developing healthy financial habits begins with knowing 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 constructing a budget and sticking to it! With a paper and pen, document your monthly income and expenditures. Review your expenditures to uncover which can be reduced, or which can be removed totally. A few ways to cut your expenditures are choosing to eat at home in lieu of eating in restaurants and switching your Cable television subscription to streaming services like Netflix instead.
Eliminate your debts
Regardless if you’ve travelled overseas or have student loan debts, the quicker you repay these debts, the better. Interest compounds as time passes, so paying off your debts by slashing expenditures or working a 2nd job could 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 much better financial position than just making the minimum monthly repayments on your debts.
Create an emergency fund
Life hardly ever works out the way you planned, so it is crucial to be prepared for any unforeseen adjustments that might be required. You might find yourself out of a job, or in an incident that inhibits 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 advisors recommend that all individuals should have a dedicated emergency fund that is capable of supporting their living expenses for 3 to 6 months.
Insurance protects you financially from any undesirable consequences, for instance income insurance in case you lose your job, health insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not necessarily beneficial to get every type of insurance available, it’s most certainly a smart 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 inflated costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause serious 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. Once you’ve got more money saved, contemplate buying some property, or investing in gold. The key to a solid 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 assistance immediately
If, for whatever reason, you’ve ended up in financial hardship, the best advice is to seek financial help as soon as possible. A lot of individuals wrestle with financial complications for years before finding 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 require any help with your financial condition, speak to the specialists at Gold Coast Bankruptcy Centre on 1300 795 575, or visit our website for additional information: www.goldcoastbankruptcycentre.com.au