7 Tips for Managing Finances in Your 30s and 40s

Your 30s and 40s are typically a time in life when career paths solidify, debts begin to resolve, and you may even be planning or raising a family. It can be stressful to think about the future when things are already busy. However, with just a few easy adjustments, you can jump-start the next decades of your life with a clear financial plan. 

Evaluate Your Expenses: What Can You Live Without? What Are Your Priorities?

Expenses are highly personal. Do you want to create your dream home, travel more often, start a hefty retirement fund, or all three? Keep your financial goals at the top of your budget to inspire you as you reach toward your goals.

Next, you need to evaluate how your current spending is impacting your objectives. Writing down your expenses for a month can help you determine if late-night takeout, subscriptions, or other habits are making a sneaky dent in your pocket. 

Afterward, create a budget and stick to it. If unexpected emergencies occur, you can make adjustments, but try to stay with your plan as consistently as possible to watch the benefits grow more each month. 

You also want to prioritize debt. If you aren’t clear on how you’re paying it off, write down a plan and incorporate it into your budget for the best results. 

1) Create a Will and Estate Plan

Don’t put off drafting or updating your will and estate plan. It’s best to review them any time a change to your financial situation occurs. You’ll gain greater peace of mind knowing your loved ones will be cared for and your wishes will be respected in case of an unexpected life event. 

It also provides a safety net in the event you become disabled or impaired in any way, and therefore unable to work. Appoint those you trust to be head of your care in advance, so you can potentially avoid excess emotional and legal turmoil during a stressful situation. 

2) Review Your Insurance Policies and Make Changes as Needed

Life insurance is another way to prepare for the worst situation, so you can relax during the best. Determine if term (specific time length insurance) or permanent life insurance is right for you. Permanent lifetime insurance is more expensive, but it does count as a greater investment if you have a considerable income due to the fact your loved ones receive guaranteed funds. 

3) Save for Retirement and Other Long-Term Goals

It’s never too late to start saving for retirement. Even a small amount each month adds up. Plus, the earlier you start putting funds away, the sooner you can benefit from compound interest. For example, by setting money aside now, the extra interest your savings accrues will contribute to greater interest savings by the next year. Starting in your 30s and 40s means your money has more time to make more money!

4) Enjoy Life Now While Being Mindful of Future Financial Needs

You don’t have to skip out on all your favorite activities or guilty pleasures but do what you can to have a good nest egg before spending on fun. Try to save at least 3-6 months of your current job’s salary, depending on the job market and your line of work. Read financial journals so you’re aware of news and trends in the job, housing, and economic market to best inform your decisions. 

5) Invest Money Wisely 

Start putting your money to work by investing in stocks or mutual funds. Keep in mind your goals and the risk level you’re comfortable with, and set aside a clear amount you can afford to place in different investments. You can also choose to research and hire trusted experts to do the investing for you. 

Investments aren’t just about money! Focus on growing your skills and hobbies to potentially become revenue streams in the future. 

6) Talk to Others in the Same Age Group

No matter where you are in your financial journey, you’re not alone. Don’t forget to speak about your goals and concerns with your peers. Whether you join a financial interests group, or simply set up a meeting with a co-worker or friend who seems to have it all together, there is always more to learn. 

7) Stay Healthy So You Can Enjoy Your Money Longer!

Most importantly, always invest in your health by eating well, exercising, getting quality sleep, and finding ways to relax. The most significant asset you have is your well-being, so create and maintain as many healthy lifestyle habits as you do financial ones.