Financial Checklist for Your Thirties and Forties

Your 30s and 40s can usher in a period in which your financial situation becomes increasing complex due to varied and sometimes conflicting priorities and expenses. You may find yourself contributing financially to support aging relatives at the same time you’re providing for your children – and trying to save for long-term financial goals of your own. An unexpected event – whether good or bad – may throw your plans and priorities into a tailspin. Though some distractions along the way are unavoidable, it’s important not to let them sabotage your short or long-term financial security. Here are a few tips to consider if you’re in your 30s and 40s.

1. Look at the big picture. You likely have a lot going on financially, so take time to step back and consider what you’re really trying to achieve overall. Make a list of all your financial obligations and goals – from daily expenses to long-term plans. Then start prioritizing them, being honest with yourself about the “need to haves” and “nice to haves.” Also re-evaluate the products and policies you already have in place and ensure you’re making the most of your options. For example, this is a critical time to maximize your qualified retirement savings. If your employer offers a 401(k) match, make sure you’re taking advantage of it, and save the allowed amount in an IRA as well.

2. Set limits. While it can be difficult to restrain your generosity, it’s crucial to set boundaries with your children and other family members if they request financial help. Lending and borrowing within your family can lead to both financial and emotional stress, so make sure you’re in a position to help – and set realistic expectations – before you provide assistance. If you anticipate needing to help finance your child’s college education or a parent’s stay in an assisted living facility, begin planning and saving well in advance to avoid compromising your own financial security.

3. Educate your children. If you have children, take steps to instill financial responsibility now. Guiding them on a path to financial independence is positive for them, but also good for your own financial future. Research some of the ways you can talk to your children about finances, teach them to spend and save responsibly, and lead by being a positive influence. Also be sure to establish a will and guardianship plan, and ensure your children are adequately covered under your insurance policies in case you or your spouse are unable to provide for them because of a premature death or disability.

4. Prepare for change. Unexpected events are bound to happen, but you can minimize the risk that an event like disability, illness, or divorce will jeopardize your financial security by having a contingency plan in place. It’s difficult to consider these circumstances, but having an emergency fund for unforeseen events may be a lifesaver someday. If your emergency fund goes unused, saving the extra cash will not have been in vain – consider using it to pad your retirement savings.

5. Seek advice. It can be extremely challenging to prioritize your financial goals during your 30s and 40s, but your future financial security depends on it. Why go it alone? Consider consulting with a financial advisor and other professionals, such as an accountant and attorney. They can help guide you through the multiple demands you face and help you make rational decisions about your finances.

The most important thing to remember during this period is that though you may find it challenging to set aside the cash for your long-term goals, it’s crucial not to lose sight of them. Ensure you’re saving a manageable amount now while time is still on your side.

Rob Davis lives in University Place with his wife Lorri and sons Wesley and Parker. He is a Financial Advisor and CERTIFIED FINANCIAL PLANNER practitioner™ with Ameriprise Financial Services, Inc. in Tacoma, Washington. Rob specializes in fee-based financial planning and asset management strategies and has been in practice for 37 years. He is licensed/registered to do business with U.S. residents only in the states of Washington, Idaho, Arizona and California. You may contact Rob at ameripriseadvisors.com/robert.g.davis.

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