There’s no question that your 20’s is a very memorable stage of your life. There’s a jittery but exhilarating sensation about becoming an adult, leaving home, and being financially independent. Regardless of whether you began a career, a university degree, or spent time traveling to other countries and gaining life experience, your 20’s is a momentous decade from both a personal and financial context. Whatever path you choose, the one constant that will consistently remain in your life is money.
The reality of the matter is, the earlier you begin saving money and developing wealth, the better your financial condition will be in the long term. Regardless of whether you intend to get married, start a family, or buy a home, there are particular financial aspirations that every person in their 20’s should attempt to accomplish 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 constructing healthy financial habits.
Create a budget
Establishing 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 money by putting together a budget and following it! With a paper and pen, document your monthly income and costs. Review your expenditures to see which can be reduced, or which can be eliminated altogether. Some ways to cut your expenses are choosing to eat at home as opposed to eating out and swapping your Cable subscription to streaming services like Amazon instead.
Eradicate your debts
Whether or not you’ve travelled the world or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so repaying your debts by cutting expenses or working a 2nd job can 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 far better financial position than just making the minimal monthly repayments on your debts.
Set up an emergency fund
Life seldom works out the way you planned, so itis imperative to be prepared for any abrupt changes that might be necessitated. You may find yourself unemployed, or in an unfortunate incident that prevents 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 propose 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 adverse consequences, for example income insurance should you lose your job, medical insurance for unforeseen medical expenses, and vehicle insurance in case your car is stolen. Although it’s not necessarily a good idea to get every kind of insurance available, it’s undeniably a wise idea to assess your individual situation to see which is best suited to you. For example, medical insurance is highly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unanticipated incident may result in substantial damage to your financial position.
Invest in a diversified portfolio
If you’ve been able to save a certain amount of money that is otherwise sitting idle in the bank, look at investing this money in a high-interest term deposit. When you’ve got more money saved, consider purchasing a property, or investing in gold. The key to a solid investment portfolio is ‘diversification’, meaning that you manage the risks of investment by putting your eggs in different baskets, so to say.
Get financial help immediately
If, for whatever reason, you’ve found yourself in financial distress, the best advice is to seek financial assistance as soon as possible. A lot of folks wrestle with financial problems for many years before finding 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 support with your financial situation, talk with the professionals at Bankruptcy Experts Cairns on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertscairns.com.au