When you turn 40, there are financial moves you must make in order to get out of debt and live comfortably following retirement. You don't want to be reckless with your finances during this stage of life. Instead, it's vital that you create a solid financial plan so that you'll have the freedom to live the life you want long term. Doing this will also reduce problems that might arise with estate planning, and you can even avoid bankruptcy. Here are ways to get finances in order while in your 40s.
Don't Take On Additional Debt Unnecessarily
If you're currently paying down your mortgage and seeking to eliminate credit card debt, this is not the time to go into debt for frivolous things. Don't use your credit card to finance new clothes, a new car you don't need, household appliances, or your expensive hobbies. Instead, determine if the things you're interested in buying are wants or needs.
Boost Your Income
Nowadays, your traditional job alone might not be enough to assist you with meeting long-term goals such as retirement or your child's college savings. Look around for side gigs that match your talents and interests but that pay well. If you're into thrifting, maybe you can purchase items and sell them on platforms such as eBay or Poshmark. If you have teaching experience, you can tutor students online on weekends or days off.
Increase Retirement Contributions
You should also put more of your income towards retirement. You can use your extra side hustle money to do this or you might use the holiday bonuses towards your retirement savings. The more money you have in retirement savings, the less debt you'll need to take on to survive after leaving the workforce.
Say No to Entitling Your Kids
If you have teens or young adult children, don't let them treat you like an endless bank account. Many parents get into debt when they pay for their kids' new apartment furniture, finance weddings, or even co-signing on their kids' first house. There is nothing wrong with helping them financially at times, but when it gets too frequent, it's time to make them be responsible for how they manage money.
Don't Forget About Your Emergency Fund
No matter your age, financial emergencies happen. It's wise to create and maintain an emergency fund. Medical emergencies can eat up a lot of your money and if you suffer a job loss, you don't know how long it will be until you find a new position.
Create A Will
You will probably live a long life, but you want to create a will in the event you pass away. Meet with your family and an estate planning attorney to discuss and prepare the will. This is especially important to do if you have minor children or elderly parents you're caring for at home.
In conclusion, your 40s doesn't have to be a time of financial uncertainty. When you use these strategies, you can thrive financially and enjoy your life without regret.If you need assistance with estate planning, contact us. We can offer helpful guidance with achieving your estate planning goals