Financial planning in your forties

It’s well known life begins at forty. Doesn’t it?!

It should be an exciting decade, full of plans and aspirations. It’s also likely to be a time of peak earning potential. Moreover, it’s a critical time to take a step back and make sure your finances are on track to meet your ambitions.

There’ll be some choices you’ll already have made in your twenties or thirties, which may have had an effect. You may have put some money away in Individual Savings Accounts (ISAs), pensions or investments, or bought your own home.

If things don’t seem to be quite as rosy as you’d hoped, though, your forties are a good time to take stock, as there’s still time to make changes and give your investments time to grow. Don’t forget, whatever savings you can make now will help you to follow your dreams later on.

Here are four tips for astute financial planning at this key stage in life.

Family outgoings

Everybody’s circumstances are different. You may have offspring at university or you may still be having to pay for child care. Whatever your situation, make sure you budget appropriately and allow for inflation, especially if you’re paying private school fees! Work out the priorities for you and your family—is it going to be the top education now or a house deposit later? Remember, it’s crucial not to sabotage your own life savings for the sake of your children as no one will benefit in the long run.

Budget ruthlessly

Just because life might feel comfy with steady pay-rises and bonuses don’t fall into the habit of spending more than you need. Do you really need that Waitrose lunch or Starbucks coffee every day?

Apps like the Charters Private Wealth Personal Finance Portal can be helpful in showing you where your money’s going. Easy steps like stopping subscriptions you no longer use or swapping bill suppliers can make a big difference.

Past studies show that investments usually outpace cash savings so any disposable income you can invest will be helpful. If you can put cash aside in a pension you’ll also be taking advantage of the tax relief available. Make sure you use your Individual Savings Account (ISA) allowance as well for more accessible funds.

Property plans

Your home will be a major part of your financial planning at this time of life. If you feel you need a bigger property, these are likely to be your optimum earning years so now is the time to secure the best mortgage you can and find your dream home. Then again, if you’re more than happy where you are, it may be a good time to remortgage to get a better deal.

Carry out a protection audit

What if the worst happened to you or your partner? Your forties are a time of life where you may find yourself part of what’s known as ‘the sandwich generation’ i.e. caring for elderly parents at the same time as looking after young children. This can put additional stress on you. Make sure you and your loved ones are protected should the unthinkable happen by ensuring you have a good emergency fund in place. Think about life assurance, critical illness cover and permanent health insurance/income protection too.

By doing some comprehensive financial planning now, you’ll have more hope of continuing your desired lifestyle throughout lifewhatever happens.

If you have any questions around this topic, please feel free to get in touch with us directly on 01789 263888 or email