|March 23, 2018||Comments Closed|
There’s no doubt that your 20’s is a very unique phase of your life. There’s an anxious but exciting feeling about becoming an adult, moving out of home, and being financially self-reliant. Whether you began a career, a university degree, or spent time traveling abroad and gaining life experience, your 20’s is a crucial decade from both a personal and financial point of view. No matter what path you choose, the one constant that will always 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 prospects will be in the future. Regardless of whether you choose to get married, start a family, or purchase a house, there are certain financial targets that every person in their 20’s should try to reach in order to secure a better a future. In this post, we’ll be taking a closer look at these targets and how you can begin building healthy financial habits.
Create a budget
Building healthy financial habits begins 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 money by constructing a budget and following it! With a pen and paper, jot down your monthly income and costs. Explore your expenses to see which can be reduced, or which can be removed entirely. Some ways to cut down your expenditures are electing to eat at home as opposed to eating out and changing your Cable subscription to streaming services like Netflix instead.
Remove your debts
Whether or not you’ve travelled overseas or have student loan debts, the quicker you repay these debts, the better. Interest compounds as time passes, so paying off your debts by reducing expenditures or working a 2nd job can save you thousands of dollars in only a couple of years. These savings can then be invested in a high-interest term deposit as an example, which will put you in a substantially better financial position than just making the minimum monthly repayments on your debts.
Develop an emergency fund
Life almost never works out the way you planned, so it is very important to be prepared for any unexpected changes that might be needed. You may find yourself unemployed, or in an unfortunate 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 advise 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 adversarial consequences, for instance income insurance in the event you lose your job, medical insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. Even though it’s not necessarily a good idea to get every form of insurance available, it’s undoubtedly a smart idea to evaluate your individual situation to see which is best suited to you. For example, medical insurance is highly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unplanned incident may cause substantial damage to your financial position.
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, think about buying some property, or investing in gold. The key to a sensible investment portfolio is ‘diversification’, meaning that you regulate the risks of investment by putting your eggs in different baskets, so to say.
Seek financial help immediately
If, for whatever reason, you’ve found yourself in financial trouble, the best advice is to seek financial assistance as soon as possible. A lot of people wrestle with financial issues for several years before getting help, which puts them in a worse position as their debts will only compound with time. The sooner you seek financial advice, the more options are available to you, so if you need any assistance with your financial position, talk to the professionals at Bankruptcy Mount Isa on 1300 818 575, or visit our website for more information: https://www.bankruptcy-mountisa.com.au/