When you hit your 40s, you may start thinking about your major life goals, both personal and financial. Many financial decisions can have a gradual, yet enormous, impact on your life. Making them at the right time ensures that you can meet your goals and achieve financial security.
Here are some important financial decisions to set in your 40s:
- Start Saving for childrens’ College: The earlier you start saving for your child’s college education, the better. Open separate savings account for your childrens’ college as it has tax advantages and benefits from compound growth.
- Increase Your Emergency Fund: Chances are that you have more expenses and obligations now than you did in your 20s and 30s. keep around 12 months of emergency funds on hand to survive unforeseen crises.
- Boost Your Retirement Savings: Save at least 20% of your income. Every pay increase should be accompanied by a savings increase.
- Diversify Your Investments: Diversify the investments into stocks, mutual funds, and peer to peer lending, real estate, etc.
- Get Life And Health Insurance: Health and life insurance policies will provide you and your family much-needed financial protection in an emergency.
Here are tips to help you choose the best health insurance plan:
a. Look for the right coverage: Choose a health plan that secures against a wide range of medical problems, and different stages of illnesses.
b. Prefer family over individual health plans: Purchase a family health plan to enjoy maximum benefits at a more affordable price
c. Choose a plan with lifetime renewability: Always check the renewability aspect as you will require a health plan, the most, during the later years of age.
d. Network hospital coverage: prefer an insurance provider that has a wide network of hospitals.
Though it may not always feel like it, you have control over your financial life. Making financial decisions at the right time and taking action early can help set you on the path to financial security and achieving your goals.