There’s no question that your 20’s is a very unique period of your life. There’s an anxious but fulfilling feeling about becoming an adult, leaving home, and being financially self-reliant. Regardless if you started a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is a significant decade from both a personal and financial context. Whatever path you decide upon, the one constant that will consistently remain in your life is money.
The truth of the matter is, the earlier you start saving money and building wealth, the better your financial scenario will be in the upcoming years. Regardless of whether you plan to get married, start a family, or purchase a property, there are a number of financial aspirations that every individual in their 20’s should try to accomplish to secure a better a future. In this article, we’ll be taking a closer look at these targets and how you can begin constructing healthy financial habits.
Make a budget
Establishing healthy financial habits starts with learning 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 putting together a budget and following it! With a pen and paper, document your monthly income and costs. Study your expenditures to uncover which can be decreased, or which can be cut out altogether. Some ways to lessen your expenditures are electing to eat at home as opposed to eating out and changing your Cable TV subscription to streaming services like Amazon instead.
Eliminate your debts
Whether you’ve travelled the world or have student loan debts, the faster you repay these debts, the better. Interest compounds with time, so repaying your debts by slashing spendings or working a 2nd job may save you thousands of dollars in only a number of 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.
Start an emergency fund
Life rarely works out the way you planned, so it is very important to be prepared for any sudden adjustments that may be required. You may end up out of work, or in an unfortunate incident that stops you from working, so having an emergency fund will be able to give you some breathing space when you need it the most. Financial advisors advise that all individuals should have a devoted emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any detrimental consequences, for instance income insurance in the event you lose your job, medical insurance for unplanned medical expenses, and vehicle insurance in the event your car is stolen. While it’s not always wise to get every type of insurance available, it’s definitely a smart idea to review your individual situation to see which is best suited to you. For instance, medical insurance is recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may lead to substantial damage to your financial situation.
Invest in a diversified portfolio
If you’ve been able to save a particular amount of money that is otherwise sitting idle in the bank, look into investing this money in a high-interest term deposit. Once you’ve got more money saved, contemplate purchasing some property, or investing in gold. The key to a well-founded investment portfolio is ‘diversification’, meaning that you handle the risks of investment by putting your eggs in different baskets, so to say.
Get financial assistance immediately
If, for whatever reason, you’ve found yourself in financial turmoil, the best advice is to seek financial assistance immediately. A lot of people struggle with financial troubles for many years before getting 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 need any guidance with your financial condition, speak to the professionals at Bankruptcy Experts Darwin on 1300 795 575, or visit our website for additional information: www.bankruptcyexpertsdarwin.com.au