Miami Beach Tax Preparers On Money Mistakes To Avoid In Your 40s

When you’re barely 20 years old, you tell yourself you have to time to figure it all out. You’re fresh out of college or perhaps still trying to figure out your path in life. By the time you hit 30, you’re well on your way of checking off a few milestones on your list, maybe get married or making partner. But by the time your 40 years old, you hope to have things running smoothly, especially in the financial department.

But, as everyone knows, life doesn’t always stay on track. Things happen, emergencies arise, plans take a detour, and well, life happens. The Miami Beach tax preparers work both with individuals and small to mid-size business owners. Through our endless conversations with our clients, we noticed certain financial patterns in people in their 40s.

Money Mistakes To Avoid In Your 40s #1: Buying Too Much Home

Miami Beach Tax PreparersFor example, for many it’s the first time they buy a house. By the time they do, they already have a kid or two and crave a big home with a yard and all the comforts fit for a growing family. The problem though is that buying tons of square footage falls into the money mistakes to avoid in your 40s category. Why? The Miami Beach tax preparers say a big home tends to translate to bigger expenses all round for decades to come, from your home loan to your interest payment, not to mention utilities bill, maintenance and repairs, home insurance, and if you live in Florida that also comes with hurricane insurance and inflated air conditioning bills.

More square footage means less money spent on other important things such as a retirement or savings plan, life insurance, medical expenses, family vacations, college funds and such.

Money Mistakes To Avoid In Your 40s #2: Not Refinancing Your Mortgage

Refinancing Your Mortgage

While still on the topic of housing, many people in their 40s don’t take the time to research for better terms when it comes to their mortgage payments. For those who take on 30-year fixed rates, they end up paying more interest probably through their 60s while they’re well on their way to retire.

Those who refinance 15 years after purchasing their home end up paying around $100,000 less in total. Refinancing is worth taking a look at.

Money Mistakes To Avoid In Your 40s #3: Not Having An Emergency Fund

According to a Schwab study, only 31% of Gen Xers have an emergency fund. What’s an emergency fund you ask? The Miami Beach tax preparers say families should have cash on hand to cover three months worth of expenses. If there’s no such savings, sudden repairs, unexpected medical bills and such will have to be paid with retirement fund or families will get in bigger debt. For those who have these emergency funds, it’s important to never let it fall behind and ensure the amount you have is adequate for the lifestyle you have. What would have been a generous amount when you were single doesn’t even scratch the surface when you’re married with kids and tons of responsibilities. Continue to contribute and not use the money for other expenses.

Money Mistakes To Avoid In Your 40s #4: Saving For College Tuition vs. Retirement

Saving For College TuitionThe Miami Beach tax preparers work with many parents, and many of them prioritize their kids instead themselves. The reality is that students can get student loans but parents can’t get a loan for their retirement. If you don’t put money aside for yourself, it’s highly likely that your own children will have to support you financially in your old age.

Put yourself first and once you set up your own retirement plan you can start thinking about helping your kids. Take a look at 529 plans to help with saving for future education costs.

The Miami Beach tax preparers remind you to take full advantage of your 40s so you can set yourself up for financial success and have peace of mind when it’s time to stop working. Call 305.868.7620 for professional advice on a retirement plan that works for you and your family.