By the time you reach your 40s, you may feel like you have your finances in order. You may have a house, a 401(k), a college savings account for your child, and a career. But you still have some time to go until retirement, and other, more immediate needs may pop up as you move further into this decade, such as caring for aging parents and addressing unexpected health issues.
Your 40s are a time to reassess your goals and ensure you remain headed in the right direction. Successful money management for 40-year-olds often focuses on your unique position in the “sandwich generation” — caring for your children and your parents. Look over our financial tips for 40-somethings and see how you can put these tips to work for you and your family.
Learn How to Say “No”
As you age, you make more money — and people will want you to share your good fortune. You’ll find people asking you for donations toward charity, co-workers’ birthday gifts, school fundraisers, and more. Many of them are worthy causes you may be happy to support, but you don’t have to say yes to everything. Turn down the rest with a polite “no, thank you.”
Protect Your Retirement Fund
Many people change jobs in their 40s. If you do, be sure to talk to a financial advisor about your options for your 401(k). You may face penalties or be required to pay fees if you choose to cash it out. This could cost you in the long run. Find out if there’s a way to roll your money over without penalties.
Help Your Children Get Ahead
One key aspect of parenting is passing knowledge on to your children. They may be ready to head off to college soon, and you want them to be prepared to take care of their own finances. Be sure to discuss money management concepts such as:
- Setting a budget
- Saving for expensive items
- Doing taxes
Don’t Worry About Keeping Up with Others
You should let go of any attempts to compete with friends and neighbors over who has the nicest material things. You won’t gain anything by having the best car or the most expensive house. Plus, that type of mentality can lead you to pile up debt.
Start Planning Seriously for Your Future
Have you come up with a vision for your retirement? You should begin to explore those options. You’ll want to know how much you’ll need to save to achieve your goals. Talk to an advisor to see if you’re on the right path, and if not, start making changes to get where you need to be.
Use these financial tips to keep yourself on track throughout your 40s. For more financial tips by age, check out the full infographic here.