Last Updated on April 26, 2024 by Erin
Discover invaluable financial wellness tips for navigating midlife and beyond with confidence and clarity.
Introduction to Financial Wellness
What Is Financial Wellness?
Disclaimer: I am not a finance professional, nor do I consider myself an expert in the area of finances. This post just highlights what I’ve learned in my own midlife journey to be financially literate and independent.
Financial wellness might not sound as exciting as, say, planning your next vacation or trying out a new hobby, but trust me, it’s a game-changer, especially at this stage of life.
So, what exactly is financial wellness? Think of it as the ultimate balance between your money and your life. It’s not just about having a fat bank account (though that’s nice too), but it’s also about feeling secure, confident, and in control of your financial situation.
And why is it so crucial during midlife? Well, think about it. This is the time when you’re juggling a bunch of responsibilities—maybe you’re still supporting your kids, caring for aging parents, or thinking about your own retirement. Financial wellness in midlife sets the stage for a smooth ride into the golden years, allowing you to enjoy life without constantly stressing about money.
I didn’t really get the wake-up call about financial wellness until my husband and I had a conversation about what I should do if something were to happen to him. I realized I was completely clueless and had been relying on him to understand our finances. That realization was alarming, but forced me to become aware and financially literate. Now I’m passionate about helping other midlife women get a better understanding of financial stability and wellness!
Midlife Financial Challenges and Opportunities
First up, there can be several midlife challenges because of life’s wonderful curveballs and frankly the current state of the world. Whether it’s the wage gap, career interruptions for caregiving, or simply playing catch-up with retirement savings, midlife women can find themselves facing some pretty hefty financial hurdles during this stage.
But hey, it’s not all doom and gloom! In fact, midlife is packed with opportunities to kick financial butt. This is your time to shine, to harness all that wisdom and experience you’ve gathered over the years.
Maybe you’re ready to dive into investing, start that side hustle you’ve been dreaming about, or finally conquer your student loan debt. Whatever it is, the world is your oyster, and there’s never been a better time to seize those financial opportunities.
The road might be a bit bumpy at times, but you’ve got what it takes to navigate those twists and turns!
Financial Wellness Tips
1. Budgeting
This is like the blueprint for your financial house, helping you track your income and expenses, so you know exactly where your money’s going. It’s all about living within your means while still leaving a little wiggle room for fun stuff, like that new pair of shoes or fancy dinner out.
- Take some time each month to review your expenses. Look for any recurring charges or areas where you might be overspending. This helps you stay on track and identify areas where you can cut back if needed.
- Midlife often comes with its own set of surprise expenses, such as healthcare costs. Factor these into your budget to ensure you’re prepared for any unexpected financial demands.
- It can be helpful to set up automatic transfers from your checking account to your savings or investment accounts. This way, you’re consistently setting aside money for your future goals without having to think about it.
- Use apps or spreadsheets to track your income, expenses, and savings goals. Seeing your progress can help motivate you to stick to your budget and make adjustments as needed. I have created several spending trackers that are available to download for free when signing up with your email. (I rarely send emails, FYI).
If budgeting feels overwhelming or you’re unsure where to start, don’t hesitate to seek help from a financial advisor. They can provide personalized guidance and help you create a budget that works for your unique circumstances.
2. Savings (AKA Rainy Day Fund!)
Saving is like squirreling away acorns for winter—it’s all about being prepared for those unexpected expenses or big-ticket purchases down the road. Maybe it’s an emergency fund, saving for a dream vacation, or stashing cash for a down payment on a house. Saving is the key to financial security.
Pay yourself first! Make sure you’re consistently setting aside money before you have a chance to spend it.
Increase Your Income
Consider ways to increase your income, whether it’s through asking for a raise at work, taking on a side hustle or freelance gigs, or selling items you no longer need. The extra income can be a great boost to your savings efforts.
My husband and I have always had multiple side gigs going on. It may seem like a small amount in the moment, but it really adds up over time. That extra bit of income has helped us save up to purchase multiple rental properties!
If this is something you are interested in, please check out these blog post:
Ways to Make Money from Home in Midlife
Realistic Passive Income Ideas for Midlife Women
How to Make Easy Money on Your Phone
Honest “Kidizen” Review: Can You Make Money Reselling?
3. Investing as a Midlife Woman
This is where things start to get exciting! Investing is like planting seeds in a garden—you’re putting your money to work, so it grows over time. Whether you’re dipping your toes into the stock market, investing in real estate, or socking away cash in a retirement account, investing is key to building wealth and reaching your long-term financial goals.
My husband and I have been investing in real estate for 8 years. It sounds scary and complicated, but we were able to purchase 3 homes, all while earning humble teacher salaries. Do your research, make a plan, and go for it! It’s not without its challenges but it gives us incredible peace of mind for our future. Our investments have also allowed me to make a midlife career transition and work part time through self-employment.
4. Debt Management
Tackling debt is like slaying dragons—it might be scary at first, but once you conquer it, you’ll feel like a total badass! Whether you’re chipping away at student loans, credit card debt, or a hefty mortgage, having a solid debt management plan in place is essential for achieving financial wellness.
Are you aware of how much debt you have? If not, get right on that! I like to use Empower, which is completely free to use, in order to get the full picture of my assets and debt. Have you ever been curious about your net worth? Use Empower!
Back to tackling your debt- there are two different methods to consider. First off, is the snowball method, which is paying off the smallest debt first and then moving on to larger debts. Second, is the avalanche method, which is the total opposite! This is when you pay off the debt with the highest interest rate first. Personally, I would prioritize high-interest debt first, because they can cost you more in the long run.
If you are budgeting and making sure to grow your savings account, find extra ways to trim spending and allocate that amount to your debts.
5. Retirement Planning
If you are in midlife, retirement is on the horizon. Even if you’re just entering midlife and in your late 30s, you need to start thinking about it.
I personally view retirement as my dream vacation. I’m envisioning what I want it to look like and making sure I have the financial means to eventually make it my reality.
Whether you’re dreaming of traveling the world, pursuing hobbies, or spoiling your grandkids rotten, having a solid retirement plan in place is key to living your best life in your golden years.
If it feels too far away and you’re having trouble caring about retirement, make a vision board. It can change over time, and nothing is permanent on this vision board. But please allow yourself to think about what you want.
You also need to start asking yourself these questions:
- What are my retirement goals? (look at your vision board)
- Am I on track to meet my goals based on my existing retirement savings?
- How much income will I need in retirement to maintain my desired standard of living?
- Can I start maximizing my retirement contributions?
- What are my options for healthcare coverage in retirement?
- Do I fully understand my social security benefits?
- Is my estate plan up to date?
Set Financial Goals
Hopefully the previously mentioned financial wellness tips didn’t overwhelm you or scare you too much. Try taking each point step by set until you feel like you’re getting a solid grip.
Once you steady yourself, start setting some goals. And not just any goals- SMART goals.
SMART stands for Specific, Measurable, Achievable, Relevant, Time-bound. All of these factors ensure you are more likely to find success rather than having vague or impossible goals.
You will also want to break your goals down into smaller parts. Create overarching long-term goals, along with medium-sized goals to achieve in the next few years, and even smaller baby-step goals to accomplish in the short-term.
Examples of SMART Financial Goals for Midlife Women
I will save $10,000 in a high-yield savings account within the next 24 months to cover six months’ worth of living expenses in case of unexpected financial emergencies.
I will pay off $20,000 in credit card debt within the next 36 months by making monthly payments of $600, prioritizing debts with the highest interest rates first.
I will contribute 15% of my gross income to my employer-sponsored 401(k) plan each month, aiming to accumulate $1,000,000 by age 65 to support a comfortable retirement lifestyle.
I will contribute $250 per month to a 529 college savings plan for my child, with the goal of accumulating $50,000 by the time they reach college age in 18 years.
I will save $20,000 for a down payment on a home within the next five years, contributing $334 per month to a dedicated savings account.
I will set aside $3,000 per year for travel expenses, aiming to take one international vacation annually and explore at least three new destinations over the next five years.
I will achieve financial independence by age 55, accumulating $2,000,000 in retirement accounts and passive income streams to cover living expenses without relying on traditional employment.
I will contribute $3,000 per year to a health savings account (HSA) to cover future healthcare expenses in retirement, aiming to accumulate $50,000 by age 65.
I will donate 5% of my annual income to charitable organizations that align with my values and support causes such as education, healthcare, and environmental conservation.
Key Takeaways Regarding Financial Wellness Tips
You Need a Balanced Approach
Financial wellness in midlife encompasses more than just having a fat bank account. It’s about achieving balance and peace of mind across various aspects of your financial life, including budgeting, saving, investing, debt management, and retirement planning.
Assess and Make SMART Goals
Take the time to assess your current financial situation and set clear, achievable goals tailored to your midlife priorities and aspirations. Whether it’s building an emergency fund, paying off debt, saving for retirement, or pursuing other financial objectives, having specific goals helps guide your financial decisions and actions.
Be Proactive
Midlife is a critical time to take proactive steps towards financial wellness. This may include creating a budget, automating savings contributions, reviewing investment strategies, and exploring opportunities for debt consolidation or refinancing.
Be Flexible
Life is unpredictable, and financial plans may need to adapt to changing circumstances. Be prepared to review and adjust your financial goals and strategies regularly, especially as you navigate the unique challenges and opportunities of midlife and beyond.
Seek Support and Guidance
Don’t hesitate to seek support and guidance from financial professionals, such as financial advisors or credit counselors, if needed. They can provide personalized advice and expertise to help you make informed financial decisions and achieve your goals more effectively.
Celebrate Milestones
Celebrate your financial achievements and milestones along the way. Whether it’s paying off debt, reaching a savings goal, or making progress towards retirement, acknowledging your successes can boost morale and motivate you to continue on your path towards financial wellness.
Think Long-Term
Financial wellness is a journey, not a destination. Take a long-term perspective and focus on building sustainable financial habits and practices that support your well-being and security throughout midlife and beyond.
Okay, readers- what are your thoughts and experiences when it comes to financial wellness. Do you have any other tips to offer in the comments? Let us know!
Sincerely,
Erin
