Is 40 the New 20?
If you pick up the cover of any fashion magazine, they ask us “Is 40 the new 20?” While those in their 40’s are looking younger, healthier, and more fit, are they also acting younger? The 40’s are an interesting time financially. Your 40’s can make or break your retirement. For many, they are making more money than they ever have. For others, they are starting to realize they didn’t save as they should. Here are common money mistakes individuals make in their 40's:
For many individuals, the 40's are a time to splurge. You "owe" yourself a nice car, home, and other toys. However, many forget that in a few short years they may be sending a child to college, retiring, and maybe even financially taking care of their parents and children. Many wish they spent as much time saving as they did splurging. Do yourself a favor and increase your savings by 10%, this way you can still splurge, but know you are still padding that bank or investment account.
2. Working Too Much
Your 40's are a time that you are reaching your highest earning potential and that may come with the downfall of working too much. You may be promoted to manager, VP, or head of a division, however, that doesn't mean your life stops. Working too much can lead to burnout, quitting, and ultimately putting yourself in harms way financially. Be kind to yourself and take those vacation days. When you are happy, you are less likely to be careless with your money.
3. Taking a Big Financial Risk
I am all for taking risks, especially financially, if you have the opportunity for a big payoff. What I'm not for is taking a big financial risk with no backup plan. Did you quit your job for a new venture? Did you spend your child's college fund on something you think will pay off big? Taking a big financial risk at this age can lead to some sad results, including not being able to retire or foregoing college for your kids. Take risks, but make sure you have analyzed them before sacrificing funds you may not get back.
What are your thoughts on your forties? Does this resonate with you and your life? Comment below!