No matter your age, you’ll likely encounter a variety of financial challenges throughout your life. But, the obstacles you faced in your 20s and 30s are far different from those you’ll deal with while in your 40s. Instead of paying off student loan debt, buying your first home, or starting a family, your 40s will likely include a far different set of issues and experiences that will test your financial stability. Below are four money tips for 40s-somethings and ways to secure your financial future ahead of retirement.
Refrain from lending to loved ones
Chances are now that you’re in your 40s you have built a solid financial foundation. If a family member or friend comes to you and asks for a loan, although your heart will tell you to dole out the dough, listen instead to your head. The net worth you’ve worked so hard to accumulate could quickly be at risk the minute you begin loaning out money to those in your life. Remember, although retirement is still decades away, the time is now to save and plan. If you really want to help others out, only loan them an amount you know you’re comfortable with so you don’t get behind on your expenses.
Travel now, rest later
Because you have more money (hopefully) now than you did when you were straight out of college, it’s time to treat yourself and take trips with family. You always said once you were in financial order you’d spend money on travel so stop procrastinating and book your next vacation. The longer you wait, they older you’ll be and the less likely you’ll want to get out of town. Now is the perfect time to use your hard-earned cash on family travel experiences that you’ll remember for a lifetime.
Teach your children to be financially responsible
Now that you’re in your 40s and your children are a little older, they probably have a better understanding of the value of money than they did when they were younger. This is the perfect time to instill in them the importance of financial literacy and responsibility. Teaching them to make smart money choices even from a young age will help them to become more confident and independent. This is also a great time to encourage them to get a part-time job so they can learn to budget and save their own money for that brand-new iPhone.
Set up an estate plan
Estate planning is a critical part of planning for your financial future and it includes a variety of aspects, such as wills and trusts. It is always smart to make these arrangements while you are in good health and of sound mind. The first, and very critical, component of setting up an estate plan is drafting a will. This detailed document ensures your finances are distributed how you see fit and aims to curb any potential family disputes. For assistance with this process find a trusted financial advisor that will guide you toward safeguarding the income you’ve acquired over your lifetime.