|March 23, 2018||0|
There’s no question that your 20’s is a very important phase of your life. There’s a jittery but exhilarating sensation about becoming an adult, leaving home, and being financially self-reliant. Whether or not you began a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is a vital decade from both a personal and financial point of view. Regardless of what path you choose, the one constant that will consistently remain in your life is money.
The truth of the matter is, the sooner you start saving money and generating wealth, the better your financial scenario will be in the years to come. Regardless of whether you plan to get married, start a family, or buy a property, there are specific financial targets that every individual in their 20’s should endeavour to accomplish in order to secure a better a future. In this post, we’ll be taking a closer look at these goals and how you can start building healthy financial habits.
Put together a budget
Building 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 finances by putting together a budget and following it! With a paper and pen, write down your monthly income and costs. Inspect your expenditures to find out which can be cut down, or which can be cut out totally. Some ways to cut your expenses are opting to eat at home instead of eating in restaurants and substituting your Cable TV subscription to streaming services like Netflix instead.
Eradicate your debts
Regardless of whether you’ve travelled abroad or have student loan debts, the quicker you repay these debts, the better. Interest compounds over time, so repaying your debts by reducing expenditures or working a second 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 much better financial position than only making the minimal monthly repayments on your debts.
Build an emergency fund
Life seldom works out the way you planned, so it is essential to be prepared for any abrupt changes that may be necessitated. You could find yourself out of work, or in an accident that inhibits you from working, so having an emergency fund will be able to give you a bit of breathing space when you need it the most. Financial advisors strongly recommend that all individuals should have a devoted emergency fund that can support their living expenses for three to six months.
Insurance protects you financially from any undesirable consequences, for example income insurance in the event you lose your job, medical insurance for unforeseen medical expenses, and vehicle insurance in the event that your car is stolen. While it’s not necessarily recommended to get every type of insurance available, it’s undeniably a wise idea to review 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 result in substantial damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed 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. Once you’ve got more money saved, think about buying some property, or investing in gold. The key to a good 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 found yourself in financial turmoil, the best advice is to seek financial assistance as soon as possible. Too many individuals struggle with financial problems for several years before seeking help, which puts them in a worse position as their debts will only compound over time. The sooner you get financial guidance, the more options are available to you, so if you need any support with your financial condition, speak with the professionals at Bankruptcy Frankston on 1300 818 575, or visit our website for more information: http://www.bankruptcy-frankston.com.au/