The fact of the matter is, the earlier you start saving money and developing wealth, the better your financial condition will be in the years to come. Regardless of whether you want to get married, start a family, or purchase a house, there are specific financial goals that every individual in their 20’s should attempt to accomplish to secure a better a future. In this blog, 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 finances by making a budget and sticking to it! With a pen and paper, document your monthly income and expenditures. Explore your expenses to find out which can be cut down, or which can be cut out entirely. Some ways to reduce your expenditures are opting to eat at home as opposed to eating in restaurants and changing your Cable television subscription to streaming services like Netflix instead.
Eliminate your debts
Whether or not you’ve travelled overseas 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 down expenses or working a second 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 example, which will put you in a considerably better financial position than only making the minimal monthly repayments on your debts.
Build an emergency fund
Life hardly ever works out the way you planned, so it is essential to be prepared for any abrupt changes that might be necessitated. You may find yourself out of work, or in an unfortunate incident that prevents you from working, so having an emergency fund will be able to give you some breathing space when you need it the most.
Financial experts highly recommend that all individuals should have a devoted emergency fund that is capable of supporting 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 unexpected medical expenses, and vehicle insurance in case your car is stolen. While it’s not necessarily recommended to get every form of insurance available, it’s certainly a clever idea to analyse your individual circumstances to see which is best suited to you. For instance, health insurance is strongly recommended for everybody due to the high costs of uninsured medical treatment. Without insurance, an unexpected incident may result in considerable 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 at investing this money in a high-interest term deposit. When you’ve got more money saved, contemplate buying some 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.
Seek financial assistance immediately
If, for whatever reason, you’ve found yourself in financial trouble, the best advice is to seek financial help immediately. Lots of folks wrestle with financial troubles 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 advice, the more options are available to you, so if you need any support with your financial position, speak with the professionals at Bankruptcy Experts on 1300 795 575, or visit our website for more information: www.bankruptcyexpertssydney.com.au