Being in your 40s often involves balancing many responsibilities and it can become easy to neglect your own financial well being. But it’s not too late to secure your future. Here are some tips that may help you financially make the most of your 40s.
1. Create a plan
Sounds basic, but if you don’t have a financial plan, it’s time to get one. Ensure that it’s based on your needs and priorities. Work with a professional adviser that is willing to spend the time to understand what’s really important to you. Don’t see someone that just shows you their CV and tells you how good they are. You need to make sure you get a plan that is tailored to you and can help you optimise your ability to save and invest…whilst at the same time having a lifestyle you are happy with.
“If you fail to plan you are planning to fail”Benjamin Franklin
2. Grow your savings
Your 40s could be your peak earning years, so it may be a good idea to ramp up your savings and funnel some of your income into your superannuation or investment accounts. Is this better than just paying down your mortgage? Do your homework and consult with a professional financial adviser about your options. Read our previous blog here showing how research has proven the number one way to generate wealth has been through how much people chose to save.
3. Give your super a health check
It may seem like a long time away, however if you start preparing now it can make a big difference in the future. Your future self might thank you if you do a quick super health check to see how you could optimise your retirement savings. For example, by choosing a different investment option or type of risk, you may be able to earn better returns on your super. If you have multiple funds, consolidating your accounts may help you save on fees. Again, seek advice from a professional adviser before acting.
4. Avoid lifestyle creep
People generally have a tendency to inflate their standard of living as they earn more and can afford more things, such as a better car or house. While it’s only natural to want the finer things in life, you’ll likely end up with little to no financial gain if your spending rises as quickly as your income. It might make sense to make short term goals and not use all your money up at once. For example allocate an amount to a savings plan for an overseas holiday next year rather than spending right now. Then put the rest into an investment account. You still get to have your trip, but you also accumulate savings along the way. Try stick to your long-term financial goals and remember the big picture. Speak to us about how you can still have a nice lifestyle and work towards long terms financial goals at the same time.
5. Consider investing more
Your 40s may be a good time to invest more – or diversify your investments – to help you grow your long-term savings. But keep in mind that it’s important to choose instruments that suit your risk appetite and time horizon. If you develop a strategy with a financial adviser you might find easier ways to achieve the return required to reach your financial goals. They will also be able to help you keep on track and make any necessary adjustments along the way.
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This article has been edited from the original copy found at our Licensee, RI Advice. https://riarticlehub.com/2019/04/01/five-financial-moves-to-make-in-your-40s/