Life Begins At 40! Quick Tips on Smart Financial Planning in These Critical Years
So you have survived your twenties and trudged through your thirties and now you are ready to make ‘grown up’ financial decisions for you and your family. After all, the statutory retirement age is not too far away and it would even be better if you retired early. Well, time is no longer on your side (I hate to break it to you) so there are certain decisions that need to be set in place before it is time for the rocker 🙂
Money in the bank
Make sure you have large cash reserves for those personal expenses that you know are regular or are about to come up like fixing the roof. You should be having a regular amount that you put away every month and in addition, saving up for those major expenses so that emergencies do not catch you unawares.
You need to know how much you are worth. All those years of accumulating assets (and liabilities) will provide you with information on what you are worth. This will help you keep track of your financial health and make solid plans for the future based on a good analysis of the present.
Cash is king
Keep clear of taking on any more debt by paying cash as much as you can. This will help you stick to the plan because if you cannot afford it then you should not have it. Plus, the interest rates on credit cards means you are spending extra money for literally nothing. Emergency cards are good but as often as you can, stick to paying cash; it is overall a much cheaper option.
Clear the debt
Make every effort to pay off all your debt, including your mortgage before you retire. Whatever you need to do, get it done before it’s time to hang up your boots. Set up a workable plan with a financial advisor that will have you clearing all your minor and major debts consistently as you look toward the future.
Now is the time to set up those alternative income sources that will supplement your pension and have you retire comfortably. Invest in something solid and low-risk because you can no longer afford the luxury of losing money. Also, make sure you diversify your investments so that you can have several streams of income and fallback plans in case one investment caves in.