Most people, when they reach their 40’s are faced with the same conundrum. Since they are not in the financial position that they should have been according to their own admission, they are struggling with financial instability. If you are one among them, you would do well to go through these 5 ways to keep yourself financially fit in your 40’s.
Look at your financial road map
If you have used navigation tools to reach some place, you will know how easy it is to reach a destination if you have a map available. This is the same with financial goals. If you know where you want to go and where you stand financially, it is relatively easy for you to assess the situation and make a plan. Compute your net worth. Your net worth will be your assets your liabilities. Assets will be those possessions that can be converted into liquid cash if the situation demands. Your liabilities will be the amount that you owe to people today. This will give you a fair idea of your current financial situation.
Be sure about your financial priorities
Jot down your financial priorities. If you are married and planning for a family very soon, you will need funds to bring up your child which include monthly expenses that may be incurred for a nanny or day care. If you have a grown-up child, you need to figure out about his or her education costs. If are planning for a bigger house, you need to figure out the investment for it. In all this, don’t forget that you need to plan for your increasing medical expenses as well as retirement. Your advancing age will mean more expenditure on keeping yourself healthy as well as ensuring that you have enough funds for your retirement.
If after doing the above, you find yourself woefully short of where you should have been, as is normally the case, don’t panic! You are not alone. Most people your age feel that way. Just be calm and try to find a way for each of the areas that you feel that your are deficient in. Start with the simplest. Buy a term life insurance plan and a critical illness insurance plan. The term policy will see to it that if anything unfortunate happens to you, your family would not have to bear a financial burden along with the emotional stress. The critical illness cover would ensure that if you fall critically ill, you do not have to dip into your savings to meet your requirements for funds. Remember, it’s never too late to mend.
Don’t dwell on whatever you missed doing. Instead, focus on what you can do right from this point onwards. Like what Rahul did. Rahul is in his 40’s working as an Assistant Vice President in the sales department of an FMCG company. 10 years back, he had quit his full-time job to open a retail outlet. Things did not go well and he suffered a lot of losses during this period. After 5 years of doing his own thing, he had to wind up and sell some of his assets to meet his liabilities. His savings got depleted and he had to start his career afresh. The entire episode was a big financial setback. Today, Rahul has started to focus on fortifying his financial standing. He has bought a term plan; Edelweiss Tokio Life MyLife+; to secure his family and Edelweiss Tokio Life CritiCare+ to safeguard his income from an incidence of a serious critical illness. His child is in the 5th grade and Rahul is planning to sell his current house and move into a bigger one. He has begun researching on how to build a retirement corpus and would be shortly embarking on a retirement plan.
Look at the bright side of life
Life is not all gloom and doom and serious planning. Aside from your futuristic planning, don’t forget to pat your back for some decisions that you may have taken that have kept you in good stead. Rahul had, when he was just in his early 20’s, purchased a house. He timed his purchase such that he got a good deal on the purchase price, managed to clear off his loan just as he settled into a family situation and also got decent appreciation on the value of his property. This was a very good decision. Take a look at the bright side of life, some good things that you did financially, some good investments that you made. Smile when you do that. If nothing else, it will raise your spirits.
Lastly, remember the adage, it’s never too late to mend’. If you have not started to plan for keeping yourself financially fit, you have essentially made a plan to remain financially unfit.
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