1 – 31 AUGUST 2023

Maximise your money in your 40s: 14 – 18 August

Day 3:  Manage your spending wisely

Entering your 40s is a pivotal phase of life, where financial responsibilities and goals take centre stage. It’s essential to manage your spending wisely to secure your financial future and make the most of your hard-earned money.

Challenge yourself to spend wisely with these top tips from our expert financial advisers:

Make wise decisions

Be mindful of how you spend your money and differentiate between needs and wants. Avoid unnecessary impulse purchases and focus on investments and experiences that add long-term value to your life. Before making a purchase, pause and assess whether it is a genuine need or merely a want. Distinguish between essential expenses, such as housing, healthcare, and education, and discretionary spending on items that may not add significant long-term value to your life. By curbing impulse purchases and focusing on essentials, you can make more informed financial decisions.

Studies have shown that spending money on experiences, such as travel, concerts, or educational pursuits, tends to provide more lasting happiness than material possessions. Consider allocating funds to create memorable experiences and invest in personal growth. Experiences enrich your life, create cherished memories, and have a positive impact on your overall well-being, whereas material possessions often depreciate in value over time.

Shop around for your services

In your 40s, you likely have various bills and expenses, including utilities, insurance, and subscriptions. One effective way to manage your spending is to regularly review these services and shop around for better deals. Compare rates from different providers and consider bundling services to get further discounts. Negotiating with existing service providers can also achieve better rates that over time can end up saving you quite a bit.

Eliminate high-interest debt

High-interest debts, such as credit card balances and personal loans, can erode your wealth over time, so channelling extra funds towards eliminating it is a wise decision. Prioritize paying off these debts to avoid accumulating unnecessary interest payments. Create a debt repayment plan, focusing on clearing the high-interest debts first while making minimum payments on your other debts. This approach will free up cash flow and provide you with more financial flexibility.

Avoid taking out loans on credit cards for non-essential expenses

While credit cards offer convenience and rewards, using them to finance non-essential expenses, like holidays or luxury purchases, can lead to a cycle of debt. Avoiding unnecessary debt is crucial to maintaining financial stability. If you want to take a vacation or indulge in a major purchase, consider saving up for it over time or exploring more affordable alternatives.

Managing your spending wisely in your 40s is essential for achieving financial stability and fulfilling your long-term goals. By shopping around for services, prioritizing debt repayment, avoiding unnecessary credit card loans, and focusing on experiences over material possessions, you can make the most of your money. Remember, financial success is a journey, and small, consistent efforts can yield significant results over time.

Top tips contributed by:

Sue Richards | Investment Adviser
Ph 027 339 1167

Vanessa Belton | Financial Adviser
Ph 027 222 4449

Anita Aitken-Taylor | Financial Adviser
Grad Dip Bus Studpfp prm,  CFPcm, CLUcm
Ph 021 849 097

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