Five Financial Goals For Women Over 40

Five financial goals for women over 40

They’re smart, savvy and earning great salaries – so why are professional women, many in their most important earning decade, not reaching important financial milestones, asks Karen Essex- Mooney.

OPINION: Your forties can be the most defining and lucrative decade – especially when it comes to finances. Taking the right steps can improve your financial standing and set yourself up for the years ahead.

However, as a financial adviser I still see women – often without realising it – running the risk of making themselves financial vulnerable.

According to recent research by ANZ bank, New Zealand women on average live four years longer but retire with $80,000 less than men. This makes it vital for women – even more urgently in their forties – to become single-minded in prioritising their financial health.

Here are five important financial goals to strive for:

Full control of your finances

All too often I’ve seen Kiwi women hand over the financial reins to their male partners. While it may seem easier to put your financial health in someone else’s hands, it could come back to bite you in the long term.

By 40, it’s important to exercise full control over your financial portfolio: make sure you earn more than you spend, and are on-track for retirement.

Invest in your financial literacy by reading personal finance books and websites, or take a short course to tackle the specific areas you may need help with. Make this the decade to get your financial house in order.

Zero high-interest debt

Turning 40 can often trigger women in their forties to sign up for liabilities such as expensive new cars, gadgets and wardrobes. However, in this decade it’s in your best interest to be more focused on growing your assets and investing in your retirement funds.

Instead of taking on new debt, work towards creating ‘rolling capital’ – a cash lump sum accumulated from tax rebates, work bonuses, monthly grocery savings, and any extra bits of cash – for you to spend on those little extras throughout the year.

You’ll save on interest and have peace of mind knowing you’re spending money you already have.

An adequate emergency fund

Setting up an emergency fund with three months’ salary is always a good idea – even more so in your forties. It protects you in the event of potential bumps in the road such as losing your current position, or if you need to reduce your hours due to a health or family concern.

If you’re not in the position to save three months’ salary, taking out an income protection plan to safeguard your income is another way to protect yourself and continue to maintain your financial wellbeing. The reality of being in your forties means your risk of illness and required career breaks increase dramatically.

Future-proofing your finances

Over my 17 years in the financial industry, I’ve seen a rapid rise in instances where long-term relationships or marriages dissolve and the woman’s asset base has consequently halved. For this to happen at a vulnerable age such as your forties and fifties can be financially devastating, as you may not necessarily be in the fortunate position to make up that lost value.

In these circumstances, your greatest asset is your earning capacity – so it’s important for you to invest in your career development and maintain your career path. For that reason your income is worth protecting fiercely – even if your partner earns enough to cover all your expenses. It’s not the most romantic thing to do, but this is the most essential. Go into every new relationship with your financial future intact, whatever the outcome.

Find your financial support

The best advice I received was to surround myself with the right people – and this is particularly true when it comes to your finances. Don’t be afraid to enlist strong support to help achieve your financial vision. Is building wealth important to you? Meet with a few financial advisers until you find one you’re comfortable with and who understand your vision. Is buying investment property your key action for the year? Find a mortgage broker you want to give your business to. It’s all about building your financial ‘A-team’, one that empowers you to achieve your financial goals.