If you’re on the way to financial nirvana, here are some financial goals to hit by the time you’re in your 40s. If you’ve already reached them, know that you’ve been doing something right!
Life goals such as buying a car, moving into a house of your own, and starting a family, it often becomes difficult to even consider incorporating financial habits into your personal finance. Sound financial habits pave the way for a solid financial future. If you can tick off most of these on your list of financial goals, kudos! However, if your finances are in need of pruning, fear not. It’s never too late to begin.
Additional Reading: Align Your Needs With Your Financial Goals!
Let’s check out if you’ve already made these top 3 financial moves?
Saving to invest
Instead of just saving and letting all your money sit idle in a bank account, we suggest you put your cash in investment vehicles. While a large number of investment instruments are available, make sure you choose according to your goals and capability to handle risk.
With inflation on the rise, money sitting idle in a Savings Account loses its value. Consider Mutual Fund SIPs or embrace stocks and bonds, depending on your risk appetite.
When it comes to investments, think long term. Staying invested for a long duration helps your money grow over a long time.
Additional Reading: Why People Fail In Financial Planning Despite Having Goals
Maximising your retirement savings
If you’ve already set up a contingency fund to secure yourself and your family during an emergency, it’s time you attend to your retirement fund.
The first step is to gauge the size of your savings. How much do you need to save to continue maintaining your lifestyle post retirement? Once you’ve decided your need, it’s time to review your savings. How much do you think you’ll be able to set aside each month in order to set up a sizeable fund for your retirement?
You don’t have to an expert. All you need is diligence and consistency. Take responsibility and keep at it till you have the fund you’ve got in mind. Saving for retirement doesn’t mean you have to give up on your comforts and stop having fun entirely. Don’t beat yourself up over it. Instead, understand the money coming in and going out each month.
Additional Reading: A 5-Step Approach To Deciding Your Financial Goals
Say goodbye to debt
If you’re burdened by debt, don’t panic. You’ll find several methods to handle debt. Have you heard of the Snowball method designed by the personal finance wizard, Dave Ramsey? Begin by listing your debts in the order of the smallest to the largest. Continue making the minimum payment on all of your debts except the smallest. Pay off as much as possible on the smallest debt until it’s paid off completely. Then, repeat the process with the next smallest debt.
One of the best ways of clearing long-standing debt is by liquidating one of your assets for debt repayment. If your finances are being damaged by a high-interest debt, paying if off before your other debts should be your highest priority.
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What else can you do to strengthen your personal finance?
Your financial well-being should take the highest priority for yourself. Check out these micro-habits that pave the way for a healthier finance in the long run.
- Protecting your financial information – Use complex passwords, stay updated on your bank statements and credit report, report unauthorized transactions.
- Automating your payments – Make use of the auto-debit feature to simplify your payments.
- Finding a better deal – Compare different products and see if you’re getting more bang for your buck.
- Revising your budget– Your budget needs to be reviewed from time to time. Weigh in factors such as added as well as redundant expenses.
- Staying prepared for a financial emergency– Make sure you’re covered for a medical or a financial emergency. Think Insurance!
Additional Reading: Financial Commandments For 50-Somethings
Did you know that your Credit Score is an important milestone that you can monitor? Keeping a regular check on your score is a great way to ensure that your financial habits are healthy.
Review your credit report regularly to check for red flags such as missed payment deadlines and maxed out Credit Cards! If you’re struggling to hit the 750+ Credit Score, your credit report will offer enough information on where you’re going wrong.