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- March 23, 2018
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There’s no question that your 20’s is a very important period of your life. There’s a nervous but fulfilling feeling about becoming an adult, leaving home, and being financially self-reliant. Regardless of whether you launched a career, a university degree, or spent time traveling the globe and gaining life experience, your 20’s is a valuable decade from both a personal and financial perspective. No matter what path you go with, 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 building wealth, the better your financial condition will be in the upcoming years. Regardless of whether you plan to get married, start a family, or purchase a house, there are particular financial targets that every individual in their 20’s should strive to reach so as to secure a better a future. In this post, we’ll be taking a closer look at these objectives and how you can start creating healthy financial habits.
Create a budget
Developing healthy financial habits starts with understanding 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 forming a budget and sticking to it! With a pen and paper, write down your monthly income and expenses. Review your expenses to find out which can be lowered, or which can be removed completely. Some ways to cut down your expenditures are electing to eat at home rather than eating out and switching your Cable subscription to streaming services like Netflix instead.
Remove your debts
Whether 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 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 significantly better financial position than only making the minimal monthly repayments on your debts.
Start an emergency fund
Life hardly ever works out the way you planned, so it is essential to be prepared for any abrupt adjustments that might be necessitated. You may end up out of a job, or in an accident that prevents 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 experts highly recommend that all individuals should have a dedicated emergency fund that is capable of supporting their living expenses for 3 to 6 months.
Insurance protects you financially from any undesirable consequences, for instance income insurance in case you lose your job, health insurance for sudden medical expenses, and vehicle insurance in the event your car is stolen. Though it’s not always advisable 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 high costs of uninsured medical treatment. Without insurance, an unforeseen incident may cause serious damage to your financial situation.
Invest in a diversified portfolio
If you’ve managed 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 some property, or investing in gold. The key to a sound 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 immediately
If, for whatever reason, you’ve ended up in financial turmoil, the best advice is to seek financial help immediately. Lots of folks struggle with financial complications for years before seeking help, which puts them in a worse position as their debts will only compound with time. The sooner you get financial assistance, the more options are available to you, so if you need any help with your financial position, talk to the professionals at Bankruptcy Experts Gladstone on 1300 795 575, or visit our website for more information: www.bankruptcyexpertsgladstone.com.au