In your 40s and don’t have back-up plan?

February 03, 2020 In your 40s and don’t have back-up plan?

Yeah? You might want to read on. 

In your 20s and 30s, I’d argue you’re primarily focused on two things: your career and having fun.

If you’re lucky, you’ll have had good financial habits drummed into from a young age and you’ll have been consistent squirrelling away money, making a few smart investments along the way and be on the road to living life on your terms.

Your 40s arrive all too fast.

What seemed a way off on the horizon in, say, your early-20s really starts to hit home in your early-40s if you’ve been too focused on the ‘fun’ part of your youth and haven’t been building the right foundation to have your own back as you drift into retirement age.

And I’m not just talking about retirement planning or wealth management – everyone needs a financial back-up plan!

If you don’t have a back-up plan, financially, you’re running the gauntlet, particularly if you have a family to support and financial commitments.

There are a few big ones I consistently see people in their 40s, who don’t have their own backs financially, get caught out with…

  • Major out-of-the-blue expenses – I’m talking stuff like major car repairs
  • Retrenched from a seemingly safe-as-houses, cushy, well-paid corporate gig – I’ve seen this a lot over the past three years
  • Got sick – meaning, they might not be able to work for six months or, worse, they’ll never work again
  • Someone in their extended family gets sick – and they have to take an extended period of time off to care for them

I don’t mean to sound pessimistic, but, as I alluded to, I see it regularly and it can be a real sucker punch.

In other words, it can be the kind of thing that can really set you back.

The good news is that it’s never too late to build the right foundations to get to a point where you have your own back financially.

If you don’t have a back-up plan, here are six things to seriously start thinking about…

1. You need to sit down and forensically work out where you’re most at risk .

Remembering there are some things you simply can’t account for – and start thinking through some high-level strategies around how you could hypothetically mitigate these.

2. Once you’ve got your risk profile down, the next thing you need to think about is creating a risk plan.

I’m talking one that’s easy to implement, track and, importantly, keep yourself accountable for.

3. 1 big one that people tend to overlook is insurance – life and income.

Insurance, alone, should never be your only fallback, but I’d argue it’s a must.

Here, your biggest consideration is whether to buy insurance or self insure. Do a bit of research. If you’re unsure what to do, give us a bell – we can help.

4. I can’t stress this one enough. Whatever the plan you create, make sure it’s not too rigid.

Sure, it needs to be structured and robust. But it needs to be adaptable.

Why? Life isn’t static and neither should your plan. You have to be able to fine-tune it as and when your life changes.

5. Sadly, I’ve seen people with young families end up in a situation where they go from enjoying a lifestyle they’ve been accustomed to for many years to really having to reign everything in and have to introduce a significant degree of austerity.

The cornerstone of your plan should be to ensure your family can maintain its current lifestyle in the event that something unfortunate happens to you – touch wood.

6. Lastly, you should regularly check-in and review everything to make sure you’re on track with your planning and that you’re on top of everything.

Do all make sense? If you are worried about where you’re at and feel a little behind the eight ball – don’t stress.

This kind of stuff’s our bread butter. Give us a shout, and we can talk you through what you need to do to get on the road to living life on your terms.



Disclaimer: All information contained within this article is of a general nature. It does not take into consideration your personal financial circumstances. Please consult a professional financial adviser (just like us ) when making a financial decision.

Jason Chew

I've been in the financial services industry for 10+ years and love coaching people to make the most of what they have.

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