|March 23, 2018||Comments Closed|
There’s no question that your 20’s is a very special phase of your life. There’s an anxious but fulfilling feeling about becoming an adult, moving out of home, and being financially self-reliant. Whether or not you kicked off a career, a university degree, or spent time traveling overseas and gaining life experience, your 20’s is a valuable decade from both a personal and financial point of view. No matter what path you decide upon, the one constant that will always remain in your life is money.
The truth of the matter is, the sooner you start saving money and creating wealth, the better your financial prospects will be in the years to come. Regardless of whether you choose to get married, start a family, or buy a property, there are certain financial targets that every person in their 20’s should attempt to reach 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.
Put together a budget
Constructing healthy financial habits starts 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 putting together a budget and following it! With a paper and pen, list your monthly income and expenditures. Explore your expenditures to see which can be cut down, or which can be removed entirely. A few ways to cut down your expenses are opting to eat at home in lieu of eating out and switching your Cable subscription to streaming services like Amazon instead.
Eradicate your debts
Whether or not you’ve travelled the globe or have student loan debts, the faster you repay these debts, the better. Interest compounds as time passes, so paying off your debts by cutting expenditures or working a 2nd job may save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit for instance, which will place you in a considerably better financial position than simply 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 adjustments that may be necessitated. You may end up out of work, or in an unfortunate incident that inhibits 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 recommend that all people should have a devoted 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 in case you lose your job, health insurance for unforeseen medical expenses, and vehicle insurance in the event your car is stolen. Even though it’s not always a good idea to get every form of insurance available, it’s most certainly a wise idea to analyse your individual situation to see which is best suited to you. For example, medical insurance is strongly recommended for everyone due to the inflated costs of uninsured medical treatment. Without insurance, an unanticipated incident may result in serious damage to your financial situation.
Invest in a diversified portfolio
If you’ve been able to save a specific amount of money that is otherwise sitting idle in the bank, think about investing this money in a high-interest term deposit. After you’ve got more money saved, contemplate purchasing some property, or investing in gold. The key to a sound investment portfolio is ‘diversification’, meaning that you manage 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 hardship, the best advice is to seek financial help as soon as possible. Lots of individuals struggle with financial complications for years before getting help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial guidance, the more options are available to you, so if you require any assistance with your financial position, talk to the professionals at Bankruptcy Parramatta on 1300 818 575, or visit our website for further information: https://www.bankruptcy-parramatta.com.au/