It is commonplace for a large number of people to wait until later in life to get married, have children or even change careers. That is why being in your 40s is almost like the new 30s. However, irrespective of where you find yourself physically or emotionally when you reach this age group, there are some financial aspects you need to get in order.
In your 40s you might have more financial obligations compared to your 30s but your monthly salary should also reflect a substantial growth. Before using extra monthly cash to buy a more expensive car or invest in that holiday home, make sure you have the following financial goals in place first:
1. A Healthy retirement fund
By now you should have a healthy retirement fund. If not you would need to see a financial advisor urgently to assist you with a plan that would help you make up for lost time. The retirement amount needed will differ from person to person but on average your nest egg should be 20 times your annual living expenses. So if for e.g. you need R10 000 a month to live and R120 000 a year, you’ll have to build a nest egg of around R2.4-million. Now, in your 40s it is therefore a good time to make sure your retirement fund is on track and to contribute even more if you can.
2. An Education fund for your child/children
The extra expenses of having to pay a child’s tertiary fees will put your monthly budget under severe strain. Rather start saving for your children’s education when you have some money to spare. If you don’t have children, contribute more towards your savings.
3. Updated financial admin
It’s essential to prioritize updating your financial administrative matters at this point. One crucial aspect of this process is revisiting and amending your last will and testament to ensure that it accurately reflects your current wishes and financial situation. It’s equally important to review your life insurance coverage to ensure that it provides adequate protection for you and your loved ones. These steps are essential to ensure that your financial affairs are in order and that your assets and beneficiaries are appropriately accounted for, providing you with peace of mind and financial security.
4. Debt free
If you weren’t able to free yourself from personal loans, credit cards and other forms of bad debt in your 30s, aim to get rid of your debt now. Now is also the time to pay off the house and make sure you create a healthy financial platform for your 50s.
At Debt Rescue we know life is hard. It is difficult enough to make your money last from one month to the next, let alone save for tomorrow. Through our various saving tips and advice we aim to help South African consumers cut costs where they can, so as not to fall into the debt trap. For those who have already taken on more debt than they can handle, we offer professional debt counselling services to get you back on your feet.
If you need help, don’t wait until it is too late, contact us immediately.
Bonus: Check out our free debt calculator to assist you in assessing your financial situation.