When people near the age of 40, they usually think about their career, their finances, and their family life. By this age, you might have already settled, and have a stable income, but still could be struggling to make ends meet. The bad news is that as you get older you will need more security in your life. You must think about your financial future, as in a few decades you will want to enjoy the fruit of your hard work. Your financial profile should reflect your age and your maturity.
It might be time to look through your accounts and choose new financial products that suit your long term needs accordingly. Below you will find ten accounts you should consider getting before you hit 40.
Mortgage
By the age of 40, you might have a decent employment history and be ready to settle down. If your salary has been pretty much stable in the past few years, you should think about buying your own home. If you have any debts, try to pay them off before you make an application. If you are still renting, you will not have the ability to build up credit long term for your retirement, and you need to start as soon as possible. Make sure that you check out www.nomoredebts.org/debt-help.html to consolidate your debt before you decide to get on the property ladder.
Life Insurance
The sooner you get a life insurance the cheaper it will be. People over 40 generally pay higher premiums. If you haven’t taken out an insurance yet, you might have to shop around to get the highest level of cover and the lowest price. It might be a good idea to talk to a financial advisor about your different insurance options, and your cover needs. If you have kids, you might want the insurance payout cover not only the outstanding mortgage and debt on your name, but also give them extra to live on and make funeral arrangements should the worst happen.
Savings Account
You need to give yourself enough time to save up for things that matter to you. A savings account will help you avoid getting into debt when you need to make larger purchases, and gives you an extra security for retirement. In case you lose your job or get sick, you will need some funds to fall back on to, without compromising your credit rating. You can put some money aside every month, or put a percentage of your annual bonus in a separate account.
Flexible Credit Card
If you want to make larger purchases easier, and benefit from added security, you can get a flexible credit card, to build your credit history and save on items by being able to buy them when they are available at a discounted price. From cars to household items, you can buy items using a prepaid or flexible credit card that will offer great interest rates and help you establish a healthy credit profile. If you buy items from abroad, you can also benefit from added buyer protection.
401K Account
There is no better time to start saving up for your retirement than yesterday. If you have had several jobs by the time you hit 40, you need to look at the individual 401K accounts and look for a solution to combine them into a more profitable investment. Whether you choose gold based IRAs or other types of stock market investment options, it is recommended that you consult with a professional who can explain the risks and potential returns of all accounts, so you can make an informed decision.
Additional Retirement Accounts
Sometimes one 401K account is enough, but you know your personal needs and retirement plans the best. Try to diversify your investment portfolio to stay safe and maximize your return on investment long term. You can keep some money in your saving accounts, release equity of your home, or add an extra stream of income that you put away in a separate investment account.
Credit Score Monitoring
By the age of 40, financial institutions will hold a lot of information about you. If you are thinking about remortgaging for a better deal, or buying a car on finance, you must be confident that you can achieve your financial goals. A credit score monitoring service will only cost you a few dollars a month, and can help you maintain your financial profile and make adjustments according to your report.
Investment Portfolio
You must also have a diverse investment portfolio by the time you reach 40. Whether you have a property you inherited and rent it out, or have made some angel investments into a new business, you must have something you can rely on as a backup option. Focus on long term investments, instead of short term ones, and seek professional advice to avoid unnecessary risks.
Children’s Regular Saving Portfolio
If you have kids, it might be time to start teaching them about saving up. Teenagers can be encouraged to take on a small weekend job and you can match their savings. They might put half of their earnings in a long term investment saving account, and you can put the same amount in every month. This will prevent you from having to pay for their college and their first home deposit later in life.
Cashback Accounts
As we get older and start having a modest lifestyle, we tend to spend more on our homes and life’s little luxuries, such as vacations. If you get a cashback cashing or credit account, you can earn rewards every time you use your card, and benefit from added financial protection. Whether you would like to build up air miles or get cash rewards at the end of the year to pay for your holiday shopping, there are several ways to make your money go further with a cashback account.
People in their 40s should focus on long term investment, debt reduction, and financial stability to enjoy their retirement later on in life.