Financial Planning Basics: For 40-Somethings
While y'all may not be 40-year-old virgins, you may be 40-year-old slackers when it comes to financial planning. No worries! I'm here to help you get a start on your financial planning practices and any and every age group. If you're in your 40s, congratulations! You're about halfway to retirement! Scary to think about if you neglected to plan, but if you did all of the preparation in your 20s and 30s, you should be on the right track by now.
But if you didn't, there's still time to catch up! Here are some steps to take in your financial planning practices in your 40s -- but as always, I highly suggest that you pay for the assistance of a financial planner who can help you to put all of your eggs in a row. Be sure to check out this issue of Money Magazine Australia for more tips:
Step 1 - Stay Fit and Healthy
Getting sick is expensive. If you're already healthy or could potentially get sicker, now is the time to ensure that you're taking good care of yourself. Go to your annual physical, eat your fruits and vegetables, go to a spa, get a massage regularly, go to the gym or play sports. Stay fit for as long as you can, and you'll be around as long as you can for those who matter most.
Step 2 - Invest
Not just in stocks, but in things that bring you happiness. Losing your job in your 40s is difficult because oftentimes you won't be able to find an equally decent paying job as would someone with more education and less experience who can be hired for dirt cheap. This isn't meant to scare you, but while you can, be sure to invest in a side job or a hobby that you love just in case. Brew some beer, have a landscaping business, sell paintings, start a band, cook, clean, etc. HAVE FUN!
Step 3 - Check Your Social Security Contributions & Retirement Plan
Now is a good time to see where you stand on retirement planning, including how much you can expect from Social Security. Figure out where the gaps in your planning lie, so you can make sure you use the rest of your time working to ensure that you'll have enough saved. There are great planning tools out there to see where you stand, even if you didn't want to pay for an adviser.
Step 4 - Spend Time with Your Family and Friends
This one ought to be first on the list, but never lose sight of what is important in your life: your family and friends. Always enjoy them while they are here and always remember the reason why you are working so hard -- to be able to spend as much quality/fun time with them as possible.
Step 5 - Don't Compare Your Lifestyle with Others
By age 40, you may have many friends or colleagues who are the same age who seem to really have their shit together: they're driving nice cars, taking fancy vacations, they may or may not have kids who are also very well off compared to your family, etc. Don't make comparisons; its counterproductive and will only make you feel bad about yourself, and in turn your family will suffer too. If you want to make more money, do it for yourself and for the betterment and comfort of your own family; DON'T do it to show off to the neighbors.
Step 6 - Go Into the Future with Confidence
If you lack confidence about your money, there's a problem. Work to fix all issues now so you can go about the rest of your career and your life with calmness, clarity and confidence. Yay!