It's typically a good idea for a person to think about saving for retirement and how to make their money work for them when they're young and first start to work, but the real truth is that many people don't think about financial planning until many years later, often not until they're in their 40s. This may be because they are now closer to retirement than when they were in their 20s, or they may be becoming more responsible about their spending overall. Whatever your reasons for needing advice on financial planning now that you're in your 40s, note a few quick tips.
1. Set priorities
A person in their 20s with few responsibilities may not have many priorities when it comes to their finances; they may be able to spend their money freely on whatever they so choose. However, now that you're in your 40s, consider your priorities, including college tuition for the kids, paying your mortgage, saving for retirement, saving for major repairs to the home, and so on. In your 40s, your priorities may not include a fancy new sports car or other items that could be considered a waste of money. If you don't sit down and choose your priorities, your money could wind up being wasted on any number of things, so make an actual list of those priorities, how much money you want to put to each one, and so on.
2. Little things can add up
One reason that many people in their 40s don't start saving for retirement or address their other priorities is that they often think they don't have enough money to make a difference. In truth, even putting away a few dollars every month can add up to significant savings over the years and can encourage you to save more, use more money to pay down debt rather than for frivolous purchases, etc. Even if it's just a few dollars you can put into savings or invest right now, remember that these little amounts can add up over time.
3. Take advantage of employee benefits
If your employer offers some type of retirement savings benefit, life insurance policy, or any other such financial benefit, take advantage of this. The money that they match or the amount you save in purchasing your own life insurance policy can mean more money for your own goals and savings. If you're not sure of your employee benefits, talk to your employer or human resources manager and be sure you're taking full advantage of every financial opportunity.