Forward Bank

By the time you’ve made it to your forties, you’ve usually hit your stride. You’re finally established in your career with a couple of promotions under your belt. If you’re married, you might have a couple of kids, maybe a house with a yard. If you’re single, you’ve got your space exactly the way you like it and you’ve probably figured out how to take great vacations. Forty is when most of us find out who we really are and who we want to be, and it’s when we knuckle down to develop a plan to stay on our life’s path.

Even when you’ve got it all mapped out, though, everyone can still benefit from some savvy financial advice.

Tip #1: Choose a Great Team

Build a dream team of financial professionals with expertise to support your financial and life goals. Aside from a financial professional, you should also consider enlisting the services of a Certified Public Accountant (not just a tax preparer) and an estate attorney, at a minimum. Your team can help you identify investments, prepare for retirement, manage risk, save on taxes, provide for your family no matter what life throws at you, and leave a financial legacy for your loved ones.

So how can you be sure to choose a great team? First, evaluate your needs. What do you have in place already and where are the gaps? Ask your family and friends for referrals to professionals they trust. Meet potential candidates and see if you feel like you “connect” with them; do you understand the services they’ll provide and how they’ll get paid? And once your team is in place, keep the lines of communication open, and never forget that their job is to help you and look out for the best interest of you and your family.

Tip #2: Insurance

Having the right type and amount of insurance can make a critical difference in your life, by protecting everything and everyone you care about. By your forties, you’ve worked hard to get where you are and you know there are no guarantees in life. Unexpected things happen but they don’t have to knock you off your feet when they do. That’s what insurance is for, and there are many types for many reasons.

• Protect where you live.Homeowner’s insurance protects your home, your belongings, and your finances if someone gets injured on your property. If you rent, renter’s insurance covers everything you own inside your apartment.
• Protect what you earn. Disability insurance protects your paycheck. If you’re unable to work, disability insurance will continue to pay you a significant portion of your income until you’re able to return to work or eligible for Social Security income. Disability income benefits can be taxable or tax-free.
• Protect who you love. If people rely on you to provide for them, you need life insurance. Generally speaking, purchase enough coverage so your family is provided for at the level of your current lifestyle until your youngest child reaches adulthood. Life insurance proceeds are always tax-free.
• Protect yourself and your lifestyle. Long-Term Care Insurance will cover the gap between what insurance or medicare will cover and the daily care you require. It can pay benefits for home care, skilled nursing or hospital services and may improve your quality of life if you can’t care for yourself.

Tip #3: Protect Your Credit Score

This might be a no-brainer, especially in this digital age where online security is an issue, but it’s more important than ever to actively take steps to protect your credit score. It’s a good idea for your financial wellness to check your credit report every year (at least), or more often if you’re considering a large purchase with a loan, like a house or car. During these checks, you can detect unusual activity (think identity theft) and fix any inaccuracies in your report.

Checking your credit report online is free and easy, and you’re entitled to one at no cost every year. To order your free annual credit report from one or all of the national credit reporting companies, or to purchase your credit score, visit www.annualcreditreport.com. Also check if your bank provides a credit score tool. For example, Credit Score Journey is available in Forward Bank's online and mobile banking. 

Tip #4: Pay Down High Interest Debt

You may have heard of “good” credit, like mortgage and student loans, and “bad” credit, like high-interest credit cards. Bad credit, as well as missed payments or high balances on multiple cards, can tank your credit score and hurt not only your financial future, but also your peace of mind today.

Pay down high interest-rate debt as quickly as you can and going forward, use all credit cards wisely. There are two main approaches to paying down debt:

1. Pay off cards with the highest interest rates first.
2. Pay off cards with the lowest balances first.

Tackling the highest-rate cards makes the most sense, in terms of dollars saved on interest. But if you’re feeling overwhelmed by debt and think a boost of momentum might help, then pay off the lowest balance card first – it may help to see one fewer bill each month. The important thing is to get in the habit of paying down the debt.

Your financial security depends on your ability to use credit wisely going forward. Credit cards that let you accumulate points toward rewards are a great idea – but only if you can pay them off every month and don’t carry large balances.

It’s not easy to find and assemble a true dream team or know if you’re probably covered by your insurance policies and understanding credit and debt can be overwhelming. Remember, the experts at Forward are here to help!