ProSpeak

A financial crisis can be scary at any age, but this is especially true when you’re in your 40s or 50s. Perhaps you’re way behind on saving for retirement or have too much debt from unnecessary spending. Or maybe an unexpected challenge, such as a job loss or illness took a direct hit on your finances. Regardless of how you got to this point, it’s important to develop a strategy that will help you re-establish financial stability.

Review your spending

Create a budget to help establish a positive cash flow. If you’re spending more money than you earn, you’ll need to cut back on your discretionary spending. 

Rebuild your funds

Chances are you’ve drained your emergency savings fund. If so, you’ll need to build it back up.

Reduce your debt

A survey found that people 45 to 54 reported the highest amounts of debt overall.¹ To reduce your debt, identify the amount and interest for each, then tackle it by paying off the debt with the highest interest rate first, then the next and so on. 

Revisit your financial relationships

What changes will you need to make? Consider:

• Career. Do you need to increase your income with a second or part-time job? Is there room for growth in your current career or should you consider additional education or training?
• Home. Do you currently live in an expensive location? Does it make sense to downsize or move to a lower-cost area?
• Family. If you’re financially supporting adult children, can you reduce or discontinue it? If you support your elderly parents, can your sibling(s) share the financial burden?
• Habits. Do you overspend? Are you an emotional shopper?
• Health. Can you make a lifestyle change to improve your health and potentially reduce medical costs?

Reassess your finances periodically

It’s critical to monitor progress. Consider a financial advisor to help. 

¹ 2016 Survey of Consumer Finances, Federal Reserve Board (most recent data available)

Comments