This isn’t one of those personal finance articles that tells you it’s time to completely alter your money behaviors. We won’t mention anything about the amount of money you should already have socked away for retirement or how to pay off your debt fast so you don’t have to keep paying interest charges.
Why? Well, for many people, reading that kind of information can be very stressful.
“It’s the people who need to change or need the most help and support who are also going to be the most activated in terms of their anxiety in thinking about money,” said Amanda Clayman, a financial wellness expert. “That can all too often fuel greater resistance and avoidance when it comes to dealing with their finances.”
We don’t want that. We want you to feel positive and in control of your money. So, instead of telling you a major upheaval is necessary if you don’t have money set aside for retirement, we’re going to provide you with five specific and achievable goals that are manageable whether you’ve been saving for decades or are just now realizing you are going to need a nest egg for your golden years.
Here are five things you can do to put yourself in control of your money and on the right financial track in your 40s and 50s.
1. Review your budget goals
This may sound like a no-brainer to many folks, but there are lots of people (you know who you are) who don’t have a working budget in place, or haven’t taken a look at their budget in a long time, even though their income and/or expenses may have shifted dramatically.
Your budget is your financial roadmap, and just like when you’re driving somewhere unfamiliar, it’s a good idea to check in and ensure you’re still headed in the right direction. So, grab a cup of coffee, sit down and create a budget if you don’t have one, or review your budget if you do. Only then can you ...
2. Review your savings goals
Without knowing what your income and outgo look like each month, it’s impossible to successfully set aside savings for things like retirement, your kids’ college funds, that boat you want. Chances are you’d end up saving too little or too much without a basic budget to work from. The first scenario can leave you without enough savings. The second can leave you short today when it comes to paying your bills.
Once you know how much money you can comfortably set aside as savings each month, you can...
3. Sit down with a financial planner
If you already have a financial planner, you’re probably checking in with them once every year or two to review your progress and goals. If you don’t have a financial planner (or enough money to work with one) it’s still a good idea to talk to someone about your finances. Some CPAs even provide financial guidance and can, for example, help you find the best strategy for paying down debt. They don’t necessarily have to be a Certified Financial Planner. What’s most important here want here is getting an outside perspective on what, if any, changes might help you to save more or generate more growth for the savings you already have.
4. Get your documents in order
If you don’t have a will, now is a good time to create one. This doesn’t have to be an expensive process, either. You can buy simple documents online at sites like Legal Zoom, or at stores like Staples and Office Max that will let you put your final wishes onto paper.
For more complicated wills – say you want to leave certain items or amounts of money to multiple heirs – you may need to meet with an attorney. It’s a good idea to first have a quick phone consultation with several attorneys to compare their fees and services so you get an attorney you can afford and feel comfortable with. Likewise, you may wish to appoint an executor to oversee your estate business upon your death.
Besides a will, you may also want to establish a living will or advance directive that provides guidance for your end-of-life medical decisions should you be incapable of communicating them when the time comes. You may also want to look into life insurance policies to help make sure your family is financially covered in case something happens to you. If you already have a policy in place, it’s still a good idea to review it every so often to make sure you still have the right one for your needs.
5. Review, revise, repeat
Obviously, none of the items on this list are one-and-done. It’s a good idea to revisit each point at least once every couple of years to ensure you are doing all you can to meet your personal financial goals.