5 Ways to Get Financially Fit in Your 40s

2024-08-02

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The 40s can be a milestone in an individual’s life. Your career path is charted, your income is stable, and there are several opportunities for growth. On the personal front too, you are settled with a family and possibly kids. However, all these responsibilities bring a number of challenges along with them.

Financial planning in 40s is crucial in order to ensure that you achieve your goals as well as those of your family in the long term. Here are a few pointers to keep in mind so that you can make the most of this life stage by taking steps in the direction of financial security for the well being of you and your loved ones:

Spend within your limit: You might have a greater disposable income than you did in your 20s, but that is no reason to splurge without any limit. It could lead you into debt and burden you with loans you find difficult to repay later. One of the most important tips to manage finances in your 40s is to set a budget for your expenses and spend on what is needed. Any additional savings can be channelized towards investments to help grow your money. If one fails to do this, their extravagant lifestyle could diminish savings and leave little for their nest egg.
Invest more in equity: Increasing your allocation to assets which promise growth in the next few years should be a part of financial planning in 40s. This means that your savings should be invested in instruments which promise higher returns than the current rate of inflation to give you an edge. Equities should be a part of your financial portfolio in order to fund your children’s education, your retirement and any other goals. Being a liquid asset, it can help you meet your goals as well as fund your needs during an emergency.
Zeroing upon important goals: What do you save more for? Getting your son or daughter through a reputed college in India or abroad for their further studies or pulling out all the stops for their grand Indian wedding? Are you investing enough on a monthly or yearly basis to help you achieve that amount when the time nears for your child to enter college or get married? Prioritising future goals and assessing your preparedness for them in line with your savings, investment and current economic conditions are a few tips to manage finances in your 40s.
Be prepared for retirement: 68% people are of the belief that their children will support them after retirement, while 51% feel that their savings will be exhausted once they retire. A majority of 58% are of the opinion that they might not be able to live comfortably once they retire from the workforce. Increasing healthcare costs are a point of worry for a whopping 64%. These statistics reveal that it is important to make retirement planning a part of your portfolio at a young age. Focusing on your life needs when you would be retired, gives your money time to grow and appreciate as well as benefit from the power of compounding by the time you are ready for the next phase in your life.
Buying a term plan: Did you know that term insurance provides complete financial security to your family in your absence and is the cheapest and simplest form of insurance available in the market? A term plan has one of the most affordable premium rates among all life insurance policies, all while offering policyholders the benefits of a high sum assured. You can also enhance your protective cover by purchasing riders, such as Accidental Death Benefit, Accidental Disability Benefit or Critical Illness Riders. Your current lifestyle, income, expenses, financial responsibilities should be guiding factors when choosing the right term plan.

These 5 rules can be stepping stones to a financially secure future. Take the first step by opting for Canara HSBC iSelect Smart360 Term Plan. The plan comes with flexible premium payment options, numerous payout options and a range of riders for enhanced coverage, including but not limited to, Accidental Death Benefits and Child Support Riders. It also comes with the option to cover your spouse and increase or decrease coverage in subsequent years. Consider the iSelect Smart360 Term Plan and you’ll be well on your way to financial security.