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? Your 40's are an interesting time financially because it can either 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:

1. SPLURGING

For many individuals, your 40's are a time to splurge. You "owe" yourself a nice car, home, and other toys. You can finally live the life you have been working so hard to achieve! 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 their money as they did spending it. Do yourself a favor and increase your savings by 10% this year, this way you can still splurge, but know you are still padding that bank or investment account.

If you want to get a snapshot of your spending without doing the heavy lifting, sign up for personal capital. It will show you your spending over the past year and show you if you are on track for retirement. It has a retirement analyzer built right in. So, if you want a one-stop shop for your finances today and the future, personal capital is the place.

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.

Take time to evaluate how your time is spent and try to schedule in time for yourself. Whether that is a yoga class, a coffee date with a friend, or hiring a much-needed babysitter, taking time for yourself can save you money in the long run. You won't splurge on huge vacations, houses, or cars if you are feeling happy in your day-to-day life.

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.

If you think you can take the risk and want to do it anyway, make sure you have spoken to an accountant or your financial advisor to evaluate your finances in a worst-case scenario option. You may have more than you think or you may go back to the drawing board. Life should be fun and be about taking risks, but financially you have a lot more to lose in your 40's.

What are your thoughts on your forties? Does this resonate with you and your life? Comment below!