8 Financial Lessons to Learn before You’re 40
By the time you reach age 40, you are likely settled in a job or career and hopefully have begun to save money for a retirement that seems eons away. But economists advise there are specific life/money lessons everyone reaching 40 should consider.
From credit.com, here are eight financial topics worth taking seriously at 40:
- Get housing under control – If you have not already bought a home, consider doing so now. Take a good look at what you can afford and check with your tax advisor about tax implications before beginning your search.
- Get insured – Evaluate your life situation and coverage and get a good handle now on health, home, car, disability and life insurance.
- Be cautious with credit – Whether you had to dig yourself out of student loan debt or took on an expensive new car, you’ve likely learned the pitfalls of having to make large monthly payments to get rid of debt. Resist the temptation to bankroll your life with credit cards.
- Plan ahead – IRAs and 401(k)s are important for ramping up retirement. Think hard about the lifestyle you want in retirement and be sure you are putting away enough money to get you there.
- Your credit matters – Keeping tabs on what’s in your credit report (and disputing any inaccurate information) is just good credit hygiene. Get the free annual credit report you are entitled to from each of the three major credit bureaus and monitor you credit score regularly.
- Emergencies happen – And they can be expensive. Experts recommend keeping three to six months of living expenses in an emergency fund so you can handle any surprises in the future without going into debt.
- Budgets work if you stick to them – Making a budget is not the accomplishment. Make sure you are staying within the guidelines you have set or determine the reasons you may not be sticking to it and figure out how to fix it.
- Ask questions – By your 40th birthday you’ve hopefully realized you don’t know it all. Ask for help or consult a finance expert when you feel overwhelmed or unsure.