Part of being a responsible adult is managing your finances properly. If you’re a novice in the world of money management, then you still have plenty of things to learn to become a financially savvy individual. The problem with financial matters is that they always seem daunting and complicated. Thus, many fresh graduates are overwhelmed by all the heavy jargon and varying pieces of advice from finance experts. However, gaining control over your finances doesn’t have to be too complex. Below, we’ll simplify things for you by providing a concise guide on saving, investing, and buying insurance.
This is a fundamental step in money management, and it’s such a basic concept that even children are familiar with its premise. Just as kids save portions of their allowance to buy toys, it’s necessary for adults to set aside a percentage of their salaries to grow their finances.
If you still don’t have a savings account, it’s high time you acquired one. According to Zack Sigel, editor of Policygenius Magazine, while there are many different savings accounts, the most common types include deposit accounts, money market accounts, and certificates of deposit. Each one varies depending on liquidity and interest rate, so it’s vital that you do some research to determine which type works best for you.
While keeping a nest egg in a savings account enables you to increase your money with the interest, it’s not enough if your goal is to build wealth. To substantially boost financial growth, you have to start investing. It’s important to note that no form of investment is completely guaranteed to be fruitful. But there are several ways to control risks and mitigate losses such as choosing your investments carefully and diversifying your portfolio.
Accordingly, some beginner-friendly investments include annuities, savings bonds, cryptocurrencies, and real estate. As for real estate, it’s ideal for those who don’t have a huge chunk of money yet as it’s not required to pay the full purchase price of a property in one go. Moreover, owning real property is a secure investment strategy and can be a lucrative means of earning passive income. If you live in Melbourne, there are plenty of suburbs in the city where attractive pieces of land are available for sale, such as Wyndham Vale, Werribee, Manor Lakes, and Point Cook.
Having a life insurance policy allows you to provide family members or other beneficiaries with financial aid upon your death. While it’s true that preplanning final expenses feels odd, you can’t deny the fact that every life form eventually meets its ultimate end. Thus, the most productive and practical way to face death is to be financially prepared.
Moreover, life insurance is not simply for applying a monetary value to your life. It also serves as compensation for the inevitable consequences that come with your death. These include outstanding financial responsibilities, lost income, final medical fees, and burial costs.
Being smart with how you handle money is extremely important if you want to attain financial freedom. That being said, it’s beneficial to start early to maximise the growth of your finances.