What Should I Do with My Money? 7 Financial Tips for People in Their 40’s

These are the best years of your life. You’re still young, yet you’ve accomplished many of the goals you set out to achieve. You’ve hit a stride in your career. Perhaps you found a partner with whom you’re building a family. Or maybe you are taking new steps following a divorce. More people in the prime of their lives are reaching out for investment advice as they look toward the future.

Retirement may have seemed somewhat distant a decade ago, but now you can imagine life in your later years. Time seems to be speeding up and the next thing you know, your time left in the workplace is dwindling.

When you are in your 40’s, it’s time to take an assessment of where you are financially and set reasonable goals. If you have been managing your money on your own up until now, one question probably keeps popping up: am I doing everything I can to maximize my savings and investments for my future? Now is the perfect time to get answers by consulting a professional.

Your Career is One of Your Most Valuable Assets

If you’ve been in the workforce since leaving school, it’s likely that you’ve grown your wealth through job-related investment plans, like a 401(k). You have built a nest egg. A smart combination of savings and investments will ensure that you are comfortable in your sixties and beyond.

You may have accrued stock options over the course of your career and these assets can make up a large part of your wealth. You could benefit from an efficient way to manage the risk of these concentrated positions along with investment assets elsewhere.

Keep Up with a Competitive Job Market

In your 40’s, you have a lot of career options. The nature of work has changed since you graduated from college. You might want to set aside funds to get an advanced degree or learn a new skill to stay competitive.

Some people decide to start a business, and that requires capital investment. The same is true if you’re returning to work after taking time off to raise a family. Assess your skills and talents to make the move that’s right, given all the variables.

Too Much Risk or Too Little Risk?

In your 40’s, the question of risk pops up more frequently. While you want to make the best and safest decisions around money, perhaps you worry that your funds aren’t growing fast enough for the goals you’ve set. Like everything in life, risk involves creating a balance between security and profit. You may think you like to take risks, but once you map out the long-term plan, risk may seem less appealing to you. A seasoned professional can help you find the right balance.

Little Kids, Little Expenses. Big Kids…

Your kids are fast approaching college age, which means a big chunk of your savings may go to paying for higher education. If you haven’t yet started planning for college expenses, now is the time to start. Determine how much you want to contribute toward your children’s education and how much you can afford. You may consider contributing to a 529 fund, a tax-advantaged education savings account.

As your children grow older, their financial needs increase. They may need a car or help with their first apartment. Perhaps they want to travel. Have conversations with your children to set expectations around what expenses you plan to help with and what you expect them to earn and be responsible for.

Follow the Golden Rule

This one is easier said than done. Save more than you spend. As you earn more, it’s all too easy to treat yourself to things on your bucket list. You may find yourself losing track of your budget. Every expenditure is a choice that affects your future. The ideal time to plan on major expenses is before you get into debt. Know your limits and stick to them.

In Case of Emergency

No one wants to think about tough times, but emergencies do crop up. The company you worked for is restructuring, you’re getting divorced, or your aging parents require long term care. Perhaps there’s a medical emergency. These situations are unfortunately an unavoidable part of life. We all long for sunny days, and those days will come, but it’s a lot more comforting knowing you have a cushion to see you through the tough times. Having an emergency fund can help soften the blow of unforeseen expenses.

Manage Your Debt

Some debt is unavoidable. But you need to differentiate between good debt and bad debt. Perhaps you bought a home, and that’s considered good debt, as it provides the opportunity for potential tax breaks and provides the potential to build equity.

A lot of people feel an urge to pay down mortgages as fast as possible. But that may not always be the best option. A CERTIFIED FINANCIAL PLANNER™ can explain why it might make more sense to pay off your mortgage slowly.

Perhaps you’re the kind of person who likes to have the best and newest of everything.  Suddenly, your credit card bills are higher than you can pay off every month and you wind up with bad debt that may negatively impact your credit score and paying excessive interest. Avoid purchases that send you into a bad debt cycle that’s tough to get out of.

Plan Now for the Future

Keep track of your investments, expenses and income. You can make small changes today or face large decisions in the future. In your forties, it’s essential to make your money work for you. A CERTIFIED FINANCIAL PLANNER™ professional can suggest the best options.

For more information, make an appointment with a Marshall Financial wealth advisor.


Marshall Financial Group, Inc (“Marshall Financial”) is an SEC-registered investment adviser with its principal place of business in Doylestown, Pennsylvania.   This newsletter is limited to the dissemination of general information pertaining to Marshall Financial Group’s investment advisory services.  Investing involves risk, including risk of loss.  References to market indices are included for informational purposes only as it is not possible to directly invest in an index. The historical performance results of an index do not reflect the deduction of transaction, custodial, and management fees, which would decrease performance results. It should not be assumed that your account performance or the volatility of any securities held in your account will correspond directly to any comparative benchmark index.

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