There’s no doubt that your 20’s is a very unique stage of your life. There’s a nervous but gratifying feeling about becoming an adult, moving out of home, and being financially self-reliant. Whether you started a career, a university degree, or spent time traveling in foreign countries and gaining life experience, your 20’s is a crucial decade from both a personal and financial viewpoint. No matter what path you decide upon, the one constant that will always remain in your life is money.
The point of the matter is, the earlier you begin saving money and developing wealth, the better your financial condition will be in the years to come. Regardless of whether you intend to get married, start a family, or secure a property, there are a number of financial targets that every person in their 20’s should endeavour to reach so as to secure a better a future. In this article, we’ll be taking a closer look at these targets and how you can begin developing healthy financial habits.
Construct a budget
Establishing healthy financial habits starts with knowing 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 establishing a budget and sticking to it! With a paper and pen, document your monthly income and expenditures. Take a look at your expenses to find out which can be cut down, or which can be removed altogether. A few ways to cut down your expenses are opting to eat at home instead of eating in restaurants and switching your Cable TV subscription to streaming services like Netflix instead.
Remove your debts
Regardless if you’ve travelled abroad or have student loan debts, the quicker you repay these debts, the better. Interest compounds with time, so paying off your debts by cutting down expenditures or working a second job may 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 put you in a significantly better financial position than only making the minimal monthly repayments on your debts.
Create an emergency fund
Life hardly ever works out the way you planned, so it’s important to be prepared for any abrupt changes that may be required. You may find yourself unemployed, or in an 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 3 to 6 months.
Insurance protects you financially from any undesirable consequences, for example income insurance in the event you lose your job, medical insurance for unexpected medical expenses, and vehicle insurance in case your car is stolen. Though it’s not always wise to get every form of insurance available, it’s definitely a clever idea to analyse your individual circumstances to see which is best suited to you. For instance, medical insurance is highly recommended for everybody due to the inflated costs of uninsured medical treatment. Without insurance, an unexpected incident may cause considerable damage to your financial situation.
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, consider investing this money in a high-interest term deposit. When you’ve got more money saved, think about buying some property, or investing in gold. The key to a well-founded 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 as soon as possible
If, for whatever reason, you’ve ended up in financial trouble, the best advice is to seek financial assistance as soon as possible. Lots of people battle with financial problems for many 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 advice, the more options are available to you, so if you need any support with your financial situation, talk with the professionals at Bankruptcy Experts Frankston on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsfrankston.com.au