Financial Planning in your Forties

It is well known life begins at forty. Doesn’t it?

It should be an exciting decade, full of plans and aspirations. It is also likely to be a time of optimum earning potential.

What’s more, it is a crucial decade to take a step back and make sure your finances are on track to meet your goals.

There will be some decisions you’ll already have taken in your twenties and thirties, which will have had an impact. You may have bought your own home, or put some savings away in cash, investments, or pensions.

If things don’t look quite as rosy as you had hoped, though, your forties are a good time to take stock, as there is still time to make adjustments and give your investments time to grow.

Don’t forget, whatever savings you can make now will enable you to pursue your dreams later on.

Below are four key tips for shrewd financial planning in this important decade:

Budget Ruthlessly

Just because life may feel comfortable with regular pay rises and bonuses, don’t fall into the temptation of spending more than you need. Do you really need that Costa coffee or M&S lunch every day?

Empirical evidence shows that investments usually outperform cash savings so any disposable income you can invest will be beneficial to you long-term. If you can put money aside in a pension you’ll also be taking advantage of the tax relief available.

Carry out a Protection Audit

Think about what if the unexpected happened. Your forties are a time of life where you may find yourself part of what’s known as ‘the sandwich generation’ i.e. caring for elderly parents at the same time as looking after your children. This puts extra pressure on you. Make sure you’re protected should the worst happen by ensuring you have a good emergency fund in place. Also consider critical illness cover and life insurance.

Property Plans

Your home will be a fundamental part of your financial planning at this stage of your life. If you feel you need a larger property, these are likely to be your peak earning years so now is the time to secure the best mortgage you can and find your dream home. On the other hand, if you’re quite happy where you are, it may be a good time to remortgage to get a better deal.

Family Spending

Everyone’s situation is different. You may have children at university or you may still be having to pay nursery fees. Whatever your position, make sure you budget accordingly and allow for inflation, especially if you’re paying private school fees. Work out the priorities for your family – the best education now or a house deposit in the future? It is important not to derail your own life savings for the sake of your children, as no one will benefit in the long run.

Don’t get caught up in the intricacies of financial planning. Learn here how we at Manse Capital can help advise you to a more sound, safe, and secure future so that you can continue in the style you want to live, well beyond your forties.

Freddie Fitton

Marketing Co-Ordinator