Smart financial decisions you should be making in your 40s
Chances are, by the time you reach your 40s you’re pretty well established.
You live in your own home and you’re very comfortable with your career and income.
As life becomes more and more comfortable, complacency can begin to creep in. But, wealth and setting yourself up for financial freedom doesn’t just happen, it takes forward-thinking and smart decisions in every stage of life.
In fact, by the time you reach your 40s, there’s a good chance you’ve probably accumulated both some credit and debt. That’s why these two things will prove to be important in this next decade as you look to build wealth for your future.
Credit and debt
As you approach your 40s, credit and debt become important for many reasons.
Credit will prove advantageous as you look to further capitalise on your wealth, allowing you to leverage assets to invest in new opportunities. On the other hand, the amount of debt you carry with you may hinder your ability to build future wealth.
If you have unsecured debts, meaning those that have a high level of interest, it’s important that you look to pay these off as soon as possible. Otherwise, you are spending a lot of your after-tax income to service these outstanding debts. Money that could otherwise be spent investing in new wealth building opportunities.
12 smart financial decisions you should be considering or looking to make in your 40s
- Pay off any unsecured debts including credit cards, personal loans and outstanding student loans.
- Change your mortgage repayments to biweekly and accelerate your debt repayments.
- Get your credit score up, we recommend a credit score greater than 800.
- Build safety nets and emergency funds.
- Relook and invest in good health insurance.
- Utilise leverage to increase your wealth.
- Invest in life insurance, income protection insurance and trauma insurance.
- Tighten and clean up your budget.
- Keep your debt level to 50% of your overall wealth.
- Write a will.
- Continue learning, specialising and looking for opportunities.
- Begin planning for your future.
Using this decade to set yourself up for financial freedom is a smart decision, but often it’s hard to know where to begin and what things to tackle first.
To get personal advice on the smart financial decisions you should be making in your 40s, book a complimentary discovery session today.
