What financial conversations should you be having in your 40s?

Blog #2 smallIn your 20s, when life was carefree and you had few major responsibilities, you assumed that by the time you were in your 40s (or even 30s!), you’d have your financial situation under control.

Enter the big 4-0, and whoops, it turns out you’re not quite as on top of things as you thought you’d be. There’s a good chance you have a mortgage, kids, a few loans, and you’re working full time. There are a lot of balls in the air and you simply don’t have the time to sort out your financial affairs, so the task slips right down the ‘to do’ list.

Sound familiar? Well it’s a common scenario, but all is not lost. With some smart advice and a few shrewd financial moves you can get ahead in your 40s (quickly and simply) and start setting yourself up for a financially fit future. Here are few things to consider:

1) Look at your emotions

Yes, emotions and money are closely related. It’s important to understand how your emotional connection to money affects your attitudes and behaviours towards financial matters.

What’s really at the heart of your decisions when it comes to the big things in life?

  • Buying and paying off a property
  • Ensuring your children get the best education
  • Planning for a comfortable retirement, but still being able to enjoy life

Think about your priorities and your values when it comes to deciding on financial commitments in these areas. Are you thinking with your heart or your head? Sometimes it’s not easy to tell and it’s useful to have an independent guide.

2) Identify your financial goals

Once you have a clearer idea of your values and the way you currently use and see money, the next step is working out a flexible road map that supports the life you, and your family, want to live.

This will mean you are able to make better financial decisions, with a clear vision of where you are now, and where you want to go. As Antoine de Saint-Exupéry said, “a goal without a plan is just a wish”.

3) Think about estate planning

This is something most people in their 40s don’t think about. After all, you’re only in your 40s!

But this is the time when you need to lay the foundations for your future so you can feel secure in the knowledge that everything will be taken care of should life change unexpectedly. This process can also open up some honest conversations with your loved ones, which makes things clear for everyone.

So, think about your legacy and how you’ll allocate your financial assets. Will you become a philanthropist and give a big donation to your favourite charity? Do you want to provide as much as you can for your family, or do you want to live life to the full while you can?

These are some of the important decisions you need to be making in your 40s.

3) What about your children?

What would you like to teach your kids about money? Will you show them how to save and invest in their future?

Teaching your offspring how to make good choices around money, and how to become financially stable and independent, are among the greatest lessons they can learn. It sets them up for a comfortable life with more choices. Avoid passing on a sense of entitlement to them, because life is unpredictable and things may not work out as expected.

Remember, your 40s are the perfect time to use your experience and judgement to take control of your finances. If you’re unsure where to focus your efforts, talk to us for advice tailored to your unique situation.