A Guide to Achieving Key Financial Milestones by 50
Success and freedom mean different things to different people. When it comes to money and finance, people are going to have different dreams, goals, and milestones that they wish to achieve throughout their lives, and these can change year on year too. No two people are the same, and neither are their financial situations, but there are some key milestones that are shared by a lot of people.
Back in the day, working for the same company for your entire working life and then retiring at 65 with a secure pension was the norm, but that isn’t necessarily the case now. You want to be secure and comfortable financially when you retire and be able to live however you want, and maybe do some of the things you have always dreamt of doing. This is why being on top of your retirement funds and investments incredibly important. But how much money do you need to retire comfortably? Tally’s guide to retiring comfortably will give you all the information you need on achieving financial freedom so you can rest assured that you will be comfortable for the rest of your life. Tally is a company that helps you take back control of your debts and interest by paying off your credit cards for you so you can access their lowest credit interest line; they are financial experts.
Pay Off Your Mortgage
A mortgage is usually one of the biggest financial outgoings that you have to pay each and every month. The worry of making such a large payment each month is one you don’t want when living on a fixed income. Once you have your retirement saving plan in place and you are certain it is going to be secure and comfortable, make it your goal to pay off your mortgage before you reach 50. Choose to pay more towards the principal to see your overall balance go down much faster than if you pay out the same every month, and you will also be reducing any taxes and interest rates that these monthly payments incur.
Refinance Your House
If you are aiming for the milestone of paying off your mortgage by 50, which is sensible, then refinancing your house could be one way to achieve this. Refinancing for a shorter term with lower interest rates can save a lot of money and get your balance down much faster. Cutting your repayment time can make your payments much higher, but it means you won’t be paying for as long and are on the way to meeting this milestone much sooner.
Excellent Credit Score
Having a poor credit score can make certain things in life just that little bit harder. Interest rates on loans and insurance premiums on your vehicles may not be as easy or as effective if you have a low credit score, increasing your payments and hindering your savings. With an excellent credit score, you have the power. Business lenders will be keen for your business, renting applications go through much faster, and those interest rates and insurance costs are lower. Having a good credit score can result in you having much more financial freedom and flexibility, so work on ways to improve your score and reap the benefits.
Monthly Budget Adjustments
To be able to put more money into your retirement savings or towards your mortgage principal, you may have to adjust your monthly budgets slightly. There are some luxuries that we can actually live without; for example, do you really need a weekly takeout or to splash out at the most expensive grocery store for every shop? Make some conscious choices to reduce your living expenditure and use the money that you are saving to work towards achieving key financial milestones. These changes aren’t going to be forever but will have a huge impact on your financial freedom and security further down the line.
Purchase Life Insurance
If you have people that rely on you financially, you need to take out life insurance. Having life insurance means that if anything should happen to you, your family and dependents will receive the equivalent of your income that you would have received in life to cover their expenses, and it will help with your final expenses in life when the time comes. Figure out how much you should invest in life insurance based on your total income, estimated funeral costs, and the years of financial support your family may need so you can shop around for the cheapest deals and know that no matter what happens to you, your family will be stable and secure.
Supplement Your Income
If all these things about paying more, having a smaller monthly paycheck and less disposable income are a little bit frightening, consider supplementing your income with a side business. Find an additional way of making money so you can work towards financial milestones without any stress and worry. Deliver groceries, walk dogs, get a part time job. All of these can be done as you are approaching 50.
If you want to live a comfortable life without financial stress, working towards these milestones before you turn 50 will ensure that this is possible.