There’s no question that your 20’s is a very unique stage of your life. There’s an anxious but exhilarating 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 the world and gaining life experience, your 20’s is a momentous decade from both a personal and financial context. Whichever path you choose, the one constant that will continually remain in your life is money.
The fact of the matter is, the earlier you begin saving money and building wealth, the better your financial condition will be in the upcoming years. Regardless of whether you intend to get married, start a family, or secure a home, there are a number of financial objectives that every individual in their 20’s should try to achieve so as to secure a better a future. In this article, we’ll be taking a closer look at these objectives and how you can begin creating healthy financial habits.
Construct a budget
Creating healthy financial habits starts with understanding 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 sticking to it! With a paper and pen, jot down your monthly income and costs. Explore your expenses to uncover which can be lowered, or which can be eliminated completely. A few ways to cut your expenditures are choosing to eat at home in lieu of eating in restaurants and replacing your Cable TV subscription to streaming services like Netflix instead.
Eliminate your debts
Whether or not you’ve travelled the world or have student loan debts, the faster you repay these debts, the better. Interest compounds over time, so paying off your debts by reducing expenses 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 as an example, which will put you in a significantly better financial position than just making the minimal monthly repayments on your debts.
Develop an emergency fund
Life almost never works out the way you planned, so it is crucial to be prepared for any unforeseen adjustments that may be required. You might end up out of a job, or in an incident that hinders you from working, so having an emergency fund will be able to give you a bit of breathing room when you need it the most. Financial specialists propose that all individuals should have a dedicated emergency fund that can support their living expenses for 3 to 6 months.
Insurance protects you financially from any detrimental consequences, for example income insurance in case you lose your job, medical insurance for unexpected medical expenses, and vehicle insurance in the event that your car is stolen. Though it’s not necessarily recommended to get every type of insurance available, it’s undoubtedly a smart idea to evaluate your individual circumstances to see which is best suited to you. For example, health insurance is highly recommended for everyone due to the high costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause significant 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. After you’ve got more money saved, think about buying a property, or investing in gold. The key to a well-founded investment portfolio is ‘diversification’, meaning that you regulate 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 hardship, the best advice is to seek financial help as soon as possible. Lots of folks wrestle with financial problems for many years before getting help, which puts them in a worse position as their debts will only compound with time. The sooner you get financial guidance, the more options are available to you, so if you require any support with your financial condition, speak with the specialists at Bankruptcy Wagga Wagga on 1300 818 575, or visit our website for additional information: http://www.bankruptcy-waggawagga.com.au/