The big three-oh hits like a ton of bricks when you realize your financial life isn’t exactly where you imagined you’d be in your 30’s or 40’s as a fresh-faced 20-year-old. If you’re serious about getting your financial life under control, here’s a peek at some tips you should follow to get you back on track.
Most people approach the idea of an accident as “that’ll never happen to me” well throughout their lives, but the simple truth is the older we get, the more likely we are to have a problem or disability that prevents us from working. Most employers offer disability insurance that offers group discounts, but if your employer doesn’t, there are plenty of private plans available. You should try to cover your income until your youngest child reaches adulthood at 18, or the outstanding amount on debts like credit cards, student loans, or the mortgage.
Reduce any unsecured debt
Credit cards have become the backup funding option for millions of Americans, but the high-interest rates associated with them costs trillions each year. If you’re serious about getting a grip on your finances in your 30’s and 40’s, you should start paying down unsecured debt immediately. If you have multiple credit cards with different interest rates, start paying as much as you can monthly on the highest-interest debt first. Pay the minimum amount on other cards and then snowball that high-debt payment into them once it is paid off. Set a timeline for when you’ll have the debt paid off and stick to it by making your monthly payments on time.
Be on the same page about finances with your spouse
Did you know that nearly 70% of divorcing couples in 2014 cited fights about money as the primary reason for divorce? Most couples don’t join their finances while dating and only find out that their chosen spouse is bad with money after the marriage. If you’re in a committed and serious relationship with the person you’re considering marrying, you should be comfortable enough to discuss your future financial plans with them. Couples who don’t discuss their financial plans often find themselves at odds with one another when expenses arise.
Make use of a financial planner
Managing your finances alone can be a headache and one of the reasons many people wind up in debt. Meeting with a financial planner will help you decide on your goals for the future and can help you plan accordingly. They’ll understand your tax obligations and help you file during tax time, so that becomes much less of a stress point for you or your marriage. Financial planners can also help you make investing decisions with your income. You can choose whether you’ll be investing in ETFs or focused on more short-term gains like those made from say, a swing trading strategy.
Start maxing out your retirement savings
You’re never too young to start focusing on your retirement plans. First, you should max your 401k contributions to make sure you’re taking advantage of any employer match benefits you may have. Once your 401k is maxed, start focusing on an IRA that your financial planner can help you set up.