Throughout different stages in one’s life, every individual looks at money through different lenses and takes different approaches in its regard. When it comes to both financial dilemma and bonuses, we have different reactions depending in which phase we are currently in. This being said, the reaction mentioned includes both emotional and psychological change – which depends on the way in which the respective financial dilemma is handled and managed or the bonuses are received.
However, you must not keep taking the same approach – something must change when you reach the age of 35. Rather than saving, you should start investing.
Change Your Attitude When It Comes to Debt
Unlike in your 20s, when the debt you might have accumulated was adequately small to be paid off in no time, from the age of 35 onwards, the kind of debt you will encounter will not be of the same variety as of the former. This kind of debts will be close to be impossible to pay off at one go or in a few months – quite on the contrary, they make take up to years. For example, by the time you reach the age of 35, you might be thinking of getting a home loan, or a car loan, or even university fees for yourself or even your children. If it is the first case that you are thinking about, to pay off such a loan would probably take you up to 25 years! The second one could run up to seven years, while the latter could run up even to five years!
As you might have already noticed, this kind of debt sound overwhelming, summing up to even millions of dollars! The attitude you had back in your 20s will undoubtedly not be effective anymore! For this reason, your approach MUST change and some drastic measures must be taken with regards to how you plan your finance. You can’t ignore these debts but start treating them as fixed expenditures.
The first step you should take in changing your mentality is to realize that debt is unavoidable, and it is a must to learn to change your long-term spending according the them.
One of the methods you can apply is by saving enough money to pay these debts for the first six months. Take under consideration a home loan that costs $4,000 per month as an example. This method suggests that you tighten your belt until you have around $24,000, which is equivalent to six month’s payments on the loan. However, after you have managed to save this amount of money, you should invest your money in your retirement plans!
Strengthen Your Internal Control When It Comes to Your Money
According to recent studies carried out in Singapore, out of all the jackpot addicts, nine out of ten, are in their 40s? You might ask yourself why is that? People at that age should be more financially stable. This is exactly the wrong kind of thinking. By having this belief, people at this age will be more prone such gambling addictions.
If you think about it this way, you might see the flaw in this belief. If a 20 years-old goes up to the bank or a licensed money lender – https://quickmoney.sg and asks for a loan of $10,000, he will probably be asked where do you work? The reply will probably be that he or she works a part time job. Are you positive that the bank or the money lender will actually give him the loan he is asking for? Probably not.
But what if a 40-year-old man goes to the bank and asks for a loan of the same amount of money? This man, with a stable job, and a fixed income, is going to be regarded mature enough to handle the money given to him. His loan will not be refused, but rather given to him without being posed million questions.
The way society regards a man in the peak of his adulthood is dangerous. Since you are looked upon as mature enough to take care of your own finances, unlike in your 20s where your parents used to watch you like a hawk and assess all of your spending, now you are left to your own devices.
Hence, you are now solely responsible for your finances. There is no longer a constant watch over you, which maybe kept you in check when your expenditures were getting out of hand. At the age of 35, the time has now come to strengthen your internal control over your money!
Change the Way You React to Bonuses
If your 20-year-old self came into some money unexpectedly, you would have probably gone on a shopping spree or treated yourself to a holiday. Maybe you did not think is there anything better I can do with this money? However, now that you are in you mid-30s, you should start demanding yourselves this question. What about putting them aside as a backup if you encounteran emergency when you are paying off those long-term debts? Or what if you spend them on what your children want? If you have others depending on you, your priorities may change radically.
All this said, it is not supposed to be easy. You will not wake up tomorrow and decide that you are going to cut off all of those extra expenses you used to make in your 20s. It will undoubtedly take some time getting used to it. As a matter of fact, this change has to be gradual but you will eventually get there.
Unexpected Costs Keep on Getting Larger and Larger
Now that you are not so young anymore, you might come face to face with overwhelming unexpected costs – for an example health conditions in your elderly parents. For sure, when you were younger you never encountered such costs!
And what if you lose your job and do not find a new one straight away? Unlike in your 20s, you no longer live with your parents. The bills they used to pay for back then are now on your shoulders, not to mention the loan you might probably be paying the meantime!
There will be no one to bail you out of the mess you’ve put yourself in, and if you don’t have a couple of thousands of dollars stashed in your cupboard, it will be very difficult to recover and get back on your feet. However, all of this turmoil may be avoided by taking good measures and precautions from beforehand, such as adequate saving plans, saving bonds to fixed deposits, and comprehensive insurance plans.
It is Never Too Early to Start
If you are reading this article but you are not in your mid-30s yet, start adapting yourself from now – it will be easier for you some years from now if you have already deep-rooted some of these habits in your 20s! It is never too early to start!