40 Financial Things You Should Know by 40

Alden Wicker
Posted

10. What is a financial emergency and what’s not. Sure, it may have been cute to splurge on shoes and come up short on rent when you were 22. By 40, you ought to know what it feels like to have a fat six months of savings sitting pretty in your account and the only five reasons you should be dipping into it. No, that out-of-state wedding doesn’t count. (It’s actually optional, no matter what your sister-in-law says.)

RELATED: The 3 Times I Used My Emergency Fund: Was I Right to Dip Into It?

11. What your ideal retirement will cost. Have you ever really crunched the numbers? On the internet, there are practically as many retirement calculators as there are singing cats. But most people we know don’t visit them. (The calculators, that is.) However, at 40, retirement—if you’ve planned right—may be a mere 25 years away, so you ought to know how much you need to save up. Here’s a good place to calculate that. And here’s why starting to save more right now, instead of a decade from now, will make getting there significantly easier.

12. How much you have saved for retirement. O.K., cool, you’ve been diligently contributing to your 401(k). Somewhere out there you may have an IRA or two. (And you might want to look into rolling over these balances into fewer accounts.) The important thing is to know how much you’ve saved and how much you still need to. So, go on. Dig up your passwords. Crunch the numbers. Or link your accounts in the free LearnVest Money Center and we’ll show you.

13. How to manage budget-busting friends. If you were duped by them in your 20s, shame on them. If you’re still letting it happen in your 30s, shame on you. By this age, you should know who they are and how they operate. While you may love their sense of humor or style, you may hate how empty your wallet is after you hang out with them. It’s about time you learned how to neutralize these culprits.

RELATED: Confessions of a Reformed Money Meddler

14. Your own money personality. Maybe you’re the Budget-Buster. The Protector. Or the Pleaser. Discover how your Myers-Briggs quotient is affecting your finances.

15. That, the older you get, the more complex your money life becomes. “A lot of my younger clients say, ‘I’ll be able to save more for retirement when I make more money,’ but the truth is, as they start to make more money, they have way more financial obligations,” says Taylor. “They’re not living in the shoebox apartment anymore. Then they get married, and they have a wedding to fund. Then they have kids, and they have college to save for.” The bottom line? Today is the time to start, not tomorrow.

16. How your significant other handles money. By now, you probably know his favorite color, first pet and worst habit, but do you know how he thought about money growing up? Or exactly where she stands—financially—today? Here are six money questions to ask each other and a Love & Money Bootcamp to help you get on the same page. And, when you’re ready, a financial plan to help you build the life you want together.

17. Where your parents stand financially. It’s a rough role reversal, to be sure. After all, they were probably the ones who took care of you, but trust us, you’ll be glad you had this conversation. Start by finding out how to access their account balances, health insurance and long-term care insurance. Then ask them these six money questions today.

RELATED: Aging Care: 6 Tips to Help Older Parents Manage Money

18. The basics of investing. Before you put any money in the market, you should know how it works. Get a quick tutorial here: Investing 101. Or, try our everything-you-could-possibly-need-to-know-and-more in-depth program: Start Investing Bootcamp. But don’t get ahead of yourself, either. Don’t even think about investing until you have a fully funded emergency savings account, no high-interest debt and are on track for retirement.

19. A good tax accountant. Whether you D.I.Y. your taxes or hire someone to file your returns is up to you—and depends on your financial situation. Here’s where you can find out whether it’s worth it to pay an accountant. Got other tax questions? We answer them here.

20. Your total compensation package. We know: We’ve all been so grateful to get the job that we signed on the dotted line without a backward glance, too. But that was then. By this stage in your career, you should know more than the number that makes up your base pay. “Does your employer offer disability insurance? Life insurance? You should know that,” Taylor says. The same for matching retirement plans, health benefits and even 529 plans.

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  • http://macreview.com/ Mac Review

    It’s great to stumble to this post. I’m 30 years old and almost debt free, and currently starting to build my emergency fund. Seems like I’m still on track after all – Yay! =)

    • mara

      same here!! let’s do this!!

  • Bonne

    Very enriching. There are so much to learn and so much to share about investing and planning how to grow your money. Thanks for this article.

  • Eric Raikanya

    Great article..good insights

  • queensgirl

    Great tips, in general, but there’s a typo in #39: it’s “effect change,” not “affect change.”