The 40’s are a make or break decade! It can also be a challenging time when one has mounting work and family responsibilities. These responsibilities, although exciting and life fulfilling, can also take a toll financially, mentally and physically if not managed well. Here are a few ideas to help manage your finances and ultimately your life in your 40’s:
1. Your Health
It can be hard to keep healthy in your 40’s due to stress, lack of time, etc. Remember that taking care of your health is not an all or nothing thing. Focus on the little things you can do to improve your health and mood, and I believe these could have a direct impact to your relationship with money. Some examples: Eat smaller portions. Park far away so you are forced to walk. Get out in nature and soak it in. Meditate for 5 minutes. Be appreciative of what you have. Quit smoking or drink less. Downsize the frappucino to a tall instead of the venti. You get the idea, just like money, all these little habits can snowball into great progress. And keep in mind, being healthy can lead you to better financial management.
2. Enjoy time with family
If you are raising kids, remember that spending a bunch of money on elaborate things for them is not what they really want. They want your attention and to be around you and engaged as a family. Go on a hike, to a park, play a board game, play Frisbee, ride bikes, cook a meal together; all inexpensive things to do with your time that add richness and value to your life.
3. Keep pumping up the 401k investments!
Now is crunch time, get as much of your income automatically placed in your low cost index funds each and every paycheck. You can’t afford to lose out on this decade and the power of time and compound interest. Life expectancies may keep rising, leading to a nice time horizon to let this money grow on itself.
In general you should be entering the “Extreme Asset Accumulation Zone”! Every dollar placed in savings or an asset now will be supporting you and your family in the coming decades. Think stocks, index funds, bonds, real estate, side businesses, etc.
4. Seek out your side gigs
Now is a good time to assess your life. Are you still headed in the right trajectory? Have you accomplished some the goals you had set out earlier in life? Pehrhaps and most likely those priorities have shifted. Explore some side gigs that can potentially lead to extra income.
The 40’s can be difficult because that youthful optimism and sense of the possible may be tested. Studies indicate that people’s happiness tends to wane in this decade. But don’t give up, it actually goes back up in the following decades. It’s a time to refocus, assess where you came from and perhaps redefine!
5. Control the debt
The 40’s are a time to do some debt destruction. Knock down the school loans and car loans. Then get the mortgage down and control accumulating more debt. Avoid debt on vacations and consumer baubles/fancy clothes!
By 40 you start to realize life can go fast. So seize the decade one day at a time. And take care of yourself and the ones you love along the way. Focusing on these areas in your 40’s can move you closer to your FI goals!