• Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

National Debt Relief

National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Talk to a debt counselor toll free:

800-300-9550

Get Relief From Credit Card Debt

Medical Bills and Unsecured Loans

  • Services
    • Debt Settlement
    • Debt Relief Benefits
    • Qualifications
    • Is Debt Settlement Right For Me?
    • Debt Help By State
    • Debt Relief FAQs
      • How Debt Relief Affects Your Credit Score
    • Free Budget Planner Worksheets
    • Free Debt Calculator
  • Options
    • Debt Relief
    • Bankruptcy
    • Credit Card Debt
    • Debt Consolidation
  • About Us
    • Who Is National Debt Relief?
    • Accreditations
    • Proven Results – Debt Settlement Letters
  • Contact Us
    • Apply Now
    • Contact Us
  • Client Login
  • Careers
HomeBlog Personal FinanceHow To Avoid The Financial Mistakes Commonly Made By 40-Somethings
Video Transcript

Free Debt Relief Quote

  • National Debt Relief, LLC BBB Business Review
  • McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

How To Avoid The Financial Mistakes Commonly Made By 40-Somethings

June 29, 2015 by National Debt Relief

Tweet
Share6
Pin1
Share3
Reddit
10 Shares

You would think that by the time people reach their 40s they’d be pretty knowledgeable about their personal finances. And in most cases this is true. By the time you reach 40 you’ll have had enough time to learn about budgeting, how to use credit sensibly and about the importance of saving for retirement. Unfortunately, there are still some financial mistakes you could make even at this time of your life. For example, you may be having a problem figuring out how you’re going to pay for your kids’ education and when and if you will be able to retire. Beyond these issues there are some financial mistakes that you could cost you dearly if you’re not careful.

family with teenage daughter#1. Not having enough liquidity

You could fall into the clutches of a predatory payday lender if you don’t have enough cash to get you through an emergency. It’s important to have enough cash you’ll never be forced to sell off assets or to go to a high-cost lender. If you feel you don’t have the equivalent of at least three months’ living expenses tucked away in a savings account you may need to make some aggressive moves. This could sting in the short run but will pay off big in the years ahead.

#2. Becoming complacent about your consumer debt

Now that you have a good job and a nice, cozy home it’s easy to get comfortable with your consumer debt. Don’t get complacent about carrying too much. Add up your consumer debt and then calculate your monthly debt-to-income ratio. You might have inadvertently let it creep up to something more than 25%. If this is the case, you need to figure out some ways reduce your debt and make sure you don’t continue to add more. Otherwise, you could ultimately find yourself in a very precarious position.

#3. Not having a plan for your money

You probably took a very serious hit as a result of the Great Recession just at the point when you were working to afford a house and establish a career. And the cost of just maintaining middle-class status has been rising continually. If you’re typical you’re just now recovering from the hit you took as a result of that recession or from even having lost your house or job. This makes it important that you create a plan for your money and stick to it. The problem is that when you’re in your 40s you simply don’t have that many years left to recover.

#4. Making paying off the mortgage your top priority

We know how good it would feel to own your home free and clear and the security this would entail. But it’s usually a bad idea to put paying off your mortgage ahead of your other financial obligations. The financial guru Dave Ramsey recommends that you pay down all of your other debts, set your kids’ college funds in motion and establish your retirement savings before you pay off your house.

#5. Believing that you can add value to your home by remodeling

You may want to turn that 1970s-era bathroom into something new and luxurious but don’t believe that this will add value to your home. The first thing your buyer is likely to do is just rip it out. Never count on any remodeling projects to have the same value to the prospective buyer as they do to you. For that matter, if you over-customize this might actually lower your home’s value.

#6. Prioritizing your kids’ education ahead of saving for retirement

You can feel pressured to put your kids’ education ahead of saving for retirement when you see your friends putting their kids through college. But if your retirement savings aren’t on target then funding your children’s’ education isn’t a good move. They can take out a loan for their education but you can’t take out a loan to fund your retirement. The best way to think of this is as if you were on an airplane and there was an emergency and you put on your kids’ oxygen masks before putting on your own. That doesn’t make sense nor does putting your kids’ college ahead of your retirement.

#7. Taking money out of your retirement savings

One of the most powerful forces in the world is compound interest. When you combine this with time it’s like magic in terms of what it can do for your retirement savings. But when you dip into your savings, even for the best of reasons, you take away someretirement fund boxof that time that makes long-term saving so effective. And if you take money out of your 401(k) before you reach 59 1/2 you’ll not only pay a 10% penalty, you’ll have to pay income taxes on the money and at your standard tax rate. Plus, you’ll lose some of that power of time and compounding interest.

#8. Failing to diversify your savings and investments

You may have come out of the Great Recession a little shell-shocked about your investments. This is because at the same time as the housing market crashed so did the stock market. It’s important at this age not to put all of your eggs in one basket – whether it’s a particular investment or your house.

#9. Assuming that your best earning years are still ahead of you

You’ve probably seen your income go up almost every year but it’s a mistake to assume that this will continue. While incomes generally rise for people in their 20s and 30s and maybe somewhat in their 40s, they generally peak at around age 50. You should not only plan for your income to flatten but also be concerned about job security. It’s riskier if you lose your job as you get older. There are laws about discriminating against people because of their age but there can still be issues. You might not be fired outright but you could be “downsized” or your entire department or division could be eliminated.

#10. Believing that being risk adverse is not a good thing

There’s nothing wrong with taking risk when you’re in your 20s or early 30s. But being adverse to risk can be a very good strategy for most people in their 40s. You should have your savings account stocked so you have emergency cash, have a diversified portfolio and keep your debt very low. In other words, control the things you can control, avoid risk, and be conservative and prudent.

The net/net

The net/net is that it might be easy to start feeling financially complacent now that you’re in your 40s but it would be a mistake to set your finances on cruise control at this point. Watch out for what’s ahead and keep from making the common mistakes you’ve just read that could tank the financial security you’ve worked so hard to create.

Tweet
Share6
Pin1
Share3
Reddit
10 Shares

Do you qualify for debt consolidation?

National Debt Relief

National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

Follow National Debt Relief: Facebook Twitter Instagram Linkedin

Filed Under: Personal Finance Tagged With: common financial mistakes made by 40-somethings, financial mistakes of 40-somethings, personal finance for 40-somethings

Primary Sidebar

Trusted By Our Clients

Excellent

Rated Five Stars Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

based on 12,550 REVIEWS

"Best decision I've ever made!"

They really care about "you" and making your life easier. They answer all of your questions and are very detailed.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Kolbie P.

"Saved me from drowning in the debt."

I was up to my eyeballs in debt and National Debt Relief saved me from drowning in the debt.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Joanna W.
Canal Winchester, OH

"Helped me settle my debts that were choking me."

National Debt Relief helped me settle my debts that were choking me.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Bobbie A.
Charlotte, MI

"Taken a big weight off of my shoulders."

National Debt Relief has taken a big weight off of my shoulders.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Richard D.
Piffard, NY

"Stopped all collection calls."

National Debt Relief stopped all collection calls and are working with my creditors to settle my debts.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Patricia G.
Oran, MO

"Now I can see a light at the end of the tunnel finally."

I was in a tough spot, financially and emotionally. Now I can see a light at the end of the tunnel finally.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Susan W.
Valparaiso, IN

"I'm sleeping better knowing they are helping me to eliminate my debt."

I'm sleeping better knowing National Debt Relief is helping me to eliminate my debt.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Jodi W.
Springfield, OH
Trust Pilot Reviews

Free Debt Relief Quote

By submitting, you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls or text/SMS messages). Msg. and data rates apply. You are not required to opt in as a condition of purchase.

The sooner you call,
the sooner we can help:

800-300-9550

Recent Posts

  • Here’s Why You Need To File Your Taxes Early
  • Here Are The 6 Signs Your Future Spouse Is Bad With Money
  • How Will You Fall In The New 2019 Tax Brackets?
  • 5 Ways You Can Convince Your Spouse To Save Money Together
  • 6 Super Simple Tips to Get You Ready for Tax Season
  • 3 Strategies For Home Buying With Student Loan Debt
  • How To Strengthen Your Finances Before Another Recession
  • How To Get Started With Investing
  • Learn How To Send A Cease and Desist Letter To Creditors
  • How Furloughed Employees Finances Have Been Effected

 

FAQs about debt relief

AFCC disclosure

National Debt Relief, LLC BBB Business Review AFCC Top Ten Reviews Gold Top Consumer Reviews Trust Pilot
  • About Us
  • Contact Us
  • Privacy Policy
  • Terms Of Site
  • Disclaimer
  • Sitemap

© 2019, National Debt Relief, All Rights Reserved.

Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes.
*Clients who are able to stay with the program and get all their debt settled realize approximate savings of 50% before fees, or 30% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.