As we come to the last part of our series, we find ourselves slightly busier in all aspects of our lives. For many of us, we are living in our family home (with lots of DIY projects on the go), making sure our children are on course with all their academic and sporting schedules, making waves in our careers (hopefully getting some well-deserved bonuses), trying to balance the social aspects and making some time for a relaxing beach holiday (or ski holiday, if you already have a sun-kissed tan).

We have now built the financial foundations and formed our healthy financial habits, which puts us in good stead for our 40s, and then, when the mid-life crisis hits, there won’t be any money problems to worry about.

Here are some tips to assist you in navigating through your 40s, some of which might follow on from my previous articles:

  • Add to your RetiremeantTM savings and make tax work for you. Any contributions added to your retirement funds (pension, provident and/or retirement annuity) may be deducted against your taxable income (up to prescribed limits). You will essentially be getting tax back for being disciplined and committed to your Retiremeant™ plan. On top of this, you will be adding to your retirement pot which will mean more compound interest (interest on interest).
  • Add liquidity to your RetirementTM plan. A common phrase we use in our industry is: “pension rich, cash poor” – this refers to clients not having liquidity to pay for bucket wheel items in their retirement years such as new cars, annual holidays, children’s weddings, give back to charities, sporting events etc. A lack of liquidity planning can lead to cash flow challenges, and we, therefore, suggest chatting to your Retiremeant™ specialist on the best way to structure your plan to cater for this need. Typical investment vehicles for this would include tax-free savings accounts, unit trusts and endowments.
  • Save interest on your bond. By adding an extra R1,000 into your bond every month, you can not only shave off several years, but you can also save a massive amount of bond interest, which will mean the banks won’t be declaring huge dividends cheques to their executives.
  • Speak to your children about finances. Children look to parents for cues on how to behave, and money habits are no exception. A big part of teaching our children healthy financial habits is making sure you’re modelling them yourself. Let your child know the expectations and norms around money in your family by setting easy-to-follow examples.
  • Update and polish your Will, wealth protection and estate plan. In my previous article (Managing money in your 30s), we spoke about getting these structures in place to ensure your wishes are met when the time comes. We now have to update and polish all these components as circumstances change, so make sure that you have the correct beneficiary nominations, your Wills are correctly signed and valid, and your life policies are consistent with your needs.
  • Find some balance. Amid all this financial jargon, discipline, financial habits and responsibilities, it’s essential to find balance amongst all the ‘adulting’ and take time to spoil yourself (and your family) with the money that you’ve worked so hard for. Be it a spa day, playing golf or even a trail run in the Berg, we must not forget that life is short, and balance will keep you sane.

We’ve now done the hard part by being consistent, disciplined and forming healthy financial habits over the last two decades. As we enter the 2nd half of our financial journey, we should carry on building onto our financial plan and take one of Zig Ziglar’s quotes into consideration: “Expect the best. Prepare for the worst. Capitalize on what comes.”

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