Smart Money Tips To Make Your 40’s The Best Yet!
The only time of life that is busier than your 30’s are your 40’s! By the time you are in this great decade of growth many people feel more settled, own a home, could be married with children, in fact, it is possible they are planning for college.
At the same time those varied and demanding personal things are going on, this is prime growth time for your career! So what’s not to love?
Nothing! Your 40’s are truly a great time of life. Enjoy every day.
But in the midst of all the activity and demands in your life from your job, your family, and friends, paying attention to certain aspects of your financial life is extremely important.
There is no easier time to let your money run away from you than your 40’s. When everyone and everything needs money from you for something and you know you need to be saving for retirement.
Here are a few smart money tips to help you make your 40’s your best time of life so far and help you plan to have even better 50’s, 60’s and beyond!
Budgets rule! No really they do.
How do you eat an elephant? One bite at a time. Same with your budget. Make some small adjustments to your budget. Have two coffees out a week instead of three. Go out for dinner twice a month instead of three times. You won’t feel like you are sacrificing anything. Expect to save some serious cash.
Try and forget about that money you are saving (like the $20 you find in your jeans pocket). Act like you never got paid it in the first place. What money? Oh yes the money that accumulates while you are not watching. That money! And look how cool this is … the sneaky, on the sly money saving technique to achieve your financial goals that you don’t even notice, perfect.
A separate savings account with an automatic payment is a good way to do this.
An app called SavedPlus (free – 4 stars) lets spending drive your savings. You choose the percentage. Looking to save 10%? Saved plus will put $10 aside if, for example, you buy a $100 of groceries.
Invest in the stock market.
Get educated and get going. You can start small adding a fixed amount to the market regularly, called dollar cost averaging. Or take a more aggressive lump sum approach. You do need to manage your emotions during the ups and downs of the market. Talking to a financial advisor about the trade offs can pay for itself.
There are plenty of investment apps out there but we can’t recommend them. They increase the temptation to trade more frequently and more emotionally. The result from this is higher costs and lower returns.
Patient investors are rewarded over time.
We do recommend assessing your risk tolerance as the first step in developing your investment strategy.
Do the free stuff, your kids will love you for it, and so will your bank balance.
We all know that our kids love to get new books, don’t we all, but once read they are tossed aside. Use the library, its free and the kids get new books weekly. Do free stuff, go to the park, the museum, the free festivals! Have fun for free.
Talk money. Really.
Pillow talk about cash? I know, not so romantic, but it’s important that both partners have the same information and are on the same track. One person looking after all of the transactions and the other oblivious is never a great plan, talk about it, regularly.
Plan for the big, unexpected events. You know they will happen.
We have all been there, the car needs new tires, urgent dental care, furnace goes out (in the winter!). Sometimes you can cruise along as long as nothing untoward happens, and then it does, and you wonder what to do. Get a fund and save for these emergencies … set a short and long term goal and go for it.
– via Pathway | Independent Financial Advisor
More Smart Money Tips For Your 40’s
Here are just a few more smart money tips from Forbes that every 40 something should know.
If you are already doing these, then you are ahead of the game. If not, it’s not too late to begin and make sure your money stays on a growing track!
Finish Paying Off Your High Interest Consumer Debt
One of most important things you can do for your finances in your 40s — or at any point in your life — is to pay off high-interest consumer debt. If you have high interest debt, finish it off once and for all during your 40s. All it’s doing is holding you back. If you think just because your in your 40s and you’ve lost some of your spunk, let this newlywed couple inspire you. They were able to pay off $52,000 of debt in 2 years.
Use and Pay Off Credit Cards Each Month
Just because you’ve paid off your high interest consumer debt doesn’t mean that you should avoid credit cards forever. They can be a great financial tool. Use a rewards card for most of your expenses, and pay it off each month, and you can earn free travel or get cash back. Use your credit cards regularly as part of your spending plan, and pay them off before you are charged interest.
My wife and I just got into travel hacking last year when we realized how much money we were leaving on the table in airline miles. Plus, when I read about this blogger taking his family of 7 to Hawaii for 11 days for basically free, I knew I had to learn more. In a short time, we’ve booked 7 round trip tickets with a few hotel rooms thrown in to boot. Not bad for some travel hacking newbies! Forbes contributor, Alexandra Talty, has some great travel hacking tips.
Start a Side Gig
This is also a great time to start a side gig. As you get closer to retirement, a side gig can help you save more, and it can also help you create another source of income that isn’t based on your day job. Consider a side hustle so that you can reach financial independence, and so that you have a little income even after you quit your traditional job. Now is the time to establish your side business so that you aren’t scrambling later. If you’re not sure where to get started, here are 44 ways to make more money.
Boost Your Retirement Contributions
When was the last time you adjusted your retirement account contributions? Chances are you were in your 30s the last time you upgraded your contributions. If you are making more money now than you were five or 10 years ago, it’s time to boost your retirement contributions.
Instead of putting that money toward lifestyle inflation, put some of it toward your future. This could be adding more to your 401k plan at work, opening a Roth IRA, or starting a taxable investment account. If you’re still uncertain how to get started, here’s the best way to invest for retirement.
Keep Your Home in Good Repair
Make sure that you do keep your home in good repair, though. If your roof needs replacing, that’s something that you should do. Keep up with maintenance and repairs so that things aren’t as expensive to fix in 15 years — right when you’re ready to retire.
– via Forbes
Have you tweaked your budget and taken a closer look at your retirement savings lately?