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Victor Hugo once said ‘Forty is the old age of youth. Fifty is the youth of old age.’
Whether or not you see your fiftieth birthday as a major mile-stone of your life it’s certainly a good time to take stock of your finances.
That’s why we have written this check list of 10 things to sort out before you reach the big five-O! We believe it will help you look forward to a secure future free from money worries. 1. Check your budget.
If you haven’t done so for some time you should review your current living costs. Work out just how much disposable income you have each month. Then highlight the areas you can save money – perhaps for example, by shopping around for better deals on your regular bills or on your insurance.
If it turns out that by working through this check list that you need to put more to one side for you retirement years or to start saving for your child’s future you will have a better idea of how much you can really afford.
2. Review your savings and borrowings.
It’s a fact of financial life that it usually costs more to borrow than you can earn by saving. So the message is this: if you have cash to spare, you should probably use it to pay off your debts first.
Check the rates on your Credit Card, can you get a better deal with another provider? Will your bank, or maybe another, give you a better deal on your home loan interest rate?
3. Update your retirement planning.
Many people know that the state pension won’t take you very far. But do you know how much you will actually receive? By contacting the Government department responsible for pensions it is possible to get an idea of what you can expect.
Retirement should be the longest and happiest holiday of your life but like any holiday it’s good to first calculate how much you can afford to spend. The good news is that you still have time to build up some funds to help provide for those special dreams in your retirement years.
4. Keep track of your existing investments.
You may have already started to save for the future, do you know how well your investments are performing? Maybe they are not on track to achieve what you had hoped? By reviewing your investment’s performance on a regular basis you will still have time to do something about it if they are not performing. These days it is much easier to research funds on web-sites, maybe you should also get a second opinion from an independent financial adviser. Not reviewing your investments until the day you need them may lead to a nasty shock!
5. Lay a nest egg.
Perhaps you have some major expenses in mind – helping your children with their further education or wedding, maybe a world cruise when you retire. A fixed or minimum period investment is a good way to get the best returns and to keep your money out of temptations reach.
You don’t have to take big risks to achieve better returns than those rates offered by the Banks.
6. Review your protection.
Are you sure you have enough life cover in place? It’s worth adding up how much cover you have in place, many independent financial advisers say it’s a good idea to have four times your salary worth of life cover. Amazingly good life cover doesn’t have to be expensive and you will usually find it’s a lot cheaper than you thought.
You should also consider ‘staying alive cover’ to. You know what they say ‘if you do not keep up your home loan payments your home may be at risk’, if you fell seriously ill not only would this affect your health but it could also have a devastating effect on your finances as well.
It is now possible to protect yourself from the financial implications of a heart attack or cancer.
7. Plan your Will
If you haven’t yet made a Will you should do so without delay. Preparing a Will is the best way of leaving a record of what you want to happen after you die. If you do not do so your loved ones will be left to sort out your problems at a time of great stress. Those you may have wanted to benefit could get left out.
Speak to a suitably qualified professional person about the benefits of having an up to date Will.
8. Give your kids a head start.
Start the saving habit young. A good idea is to start a savings account on the child’s behalf and let them see it grow. Whether it’s buying their first car, funding a fantastic wedding or helping them through university these things cost money! Planning for these things as early as possible will solve many future financial worries and will make their dreams reality.
9. Invest for Income
You may have built up a sum of money in the bank, from the sale of a property or by investing wisely, however, at some point it will be important for you to actually see the benefit of your hard work. You will then possibly need to consider changing your investment strategy from ‘growth’ to ‘income’. In order to achieve better returns you may have been happy taking a risk with some of your money when you were younger but can you now afford to lose what it’s taking you years to build up?
Investing for income generally means taking a lower risk and seeing the benefit each month or each year in the form of an income payment. Ultimately it’s your money and you should enjoy it!
10. Keep an eye on the parents.
Sadly, a large number of people need to have some form of help or even consider a nursing home in their old age. Talk things over with them about what their wishes are should this eventuality arise. Planning ahead can really help and by keeping funds to one side this should ease any future financial burden.
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10 things to do before you turn 50 
