45 Is the Perfect Age to Get Your Financial Life in Tip-Top Order
Ah, 45! The beginning of midlife. Think of it as getting better, not as getting older.
A smart planner like you is mature enough at this age to know a financial tune-up is always a good birthday present to yourself.
That’s especially true now, as your responsibilities grow and your window to build wealth narrows.
But take heart. These 20 money-management tips will get you on track for a secure future for you and your family.
1. Don’t Just Wish for Better Car Insurance
For many, car insurance is just one of those things where we cave in and pay. Because, just like the electric bill and phone service, we need it, right?
Yes. There’s no getting around car insurance, unfortunately. But one way you could save money is by shopping and comparing rates twice a year.
“Not only can a lot of circumstances in your life and your car (mileage, age) change in that time, but insurance companies may be changing their pricing as well, and you want to be sure you’re getting the right coverage, service and of course pricing to suit your changing needs,” says Alyssa Connolly, the director of marketing insights at The Zebra.
According to The Zebra’s 2019 State of Insurance report, consumers just aren’t doing this. And car insurance rates keep increasing, with the average person paying $1,470 a year for coverage.
The takeaway? Compare rates regularly.
And if you look through a digital marketplace called SmartFinancial, you could be getting rates as low as $22 a month — and saving yourself more than $700 a year.
It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side. Yep — in just one minute you could save yourself $715 this year. That’s some major cash back in your pocket.
So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.
2. Get a 100X the Normal Interest Rate
Operating everything out of one account can make your finances muddy and contribute undue stress to your money management.
To simplify, open an account dedicated to saving, and put your money to work. One of our favorites is Aspiration — you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
You’ll get access to two online-only accounts: one for spending and one for saving. The spending account comes with a debit card that earns 0.5% cash back on all your purchases, plus free ATMs, so you can easily access your money when you need it.
After you open your Aspiration account, use it to split your income:
- Automatically deposit a portion of your income into your spending account, and use that to cover basic expenses like rent and bills, plus fun stuff; like eating out, shopping or going on vacation.
- Deposit what’s left into your Aspiration savings to keep it out of sight and let it grow. You’ll earn 2.00% APY as long you deposit just $1 a month. We recommend squirreling more when you can, but we like that you won’t lose the perk when you can’t.
3. You’ve Built a Great Life. Now Protect It
Chances are, by the time you reach your 40s, you’ve established a life. That could mean you own your dream business. Or it could mean little ones who look up at you with awe as you read them bedtime stories. It could mean that house on a few acres with the big porch you always wanted.
You’re building your dream life. If that includes a family, the last thing you want is to leave them without any financial support once you’re gone.
Maybe it’s time to think about life insurance. It doesn’t have to be the uncomfortable experience you might expect. Some newcomers in the industry are updating the old model.
Ethos, for example, can get you term life insurance in less than 10 minutes — with no medical exam — for coverage up to $1 million. Ethos offers a digital application, and customer service is available if you have questions.
It partners with a major life insurance carrier to quickly offer policies as low as $6 a month. It’s helped thousands of folks access term life insurance, including independent contractors who use Uber, Postmates, TaskRabbit and other gig apps to find work.
Don’t think about a life insurance policy as preparing for death; think about it as a birthday gift you’re giving yourself. Peace of mind.
4. Let This Company Help You Get Rid of Your Credit Card Debt
Don’t go into the rest of adulthood with debt dragging you down.
When Cheryl Cavalli, a stay-at-home mom of two, decided to launch a business as a home-based travel agent, she knew she would need to secure a loan to give herself the best possible financial foundation.
Cavalli and her husband, Virge, used Fiona (previously Even Financial) to find a loan offer that would work for them.
“All of the major loan providers were presented in a very simple table — what their rates were, what the terms were,” Virge says. With a simple search, they found a loan that ticked all their boxes and had an interest rate of just 5.9%.
A good resource is consumer financial technology platform Fiona, which can help match you with the right personal loan to meet your needs.
Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. If your credit score is at least 620, its platform can help you borrow up to $250,000, no collateral needed, with fixed rates starting at 2.49% and terms from 24 to 84 months.
Whether your goals have to do with paying off debt or financing a new business venture, Fiona’s marketplace makes it easy to find the right loan for your situation.
5. Start Investing for the Price of a Cup of a Coffee
If you’re going to be a real adult who makes small talk at parties hosted by other people your age, investing is a good place to start. And sure, becoming an investor sounds intimidating — but it really doesn’t have to be.
If you’re like most of us and wish your money would just take care of itself, consider starting an investment account through Acorns.
You can start small and stack up change over time with its “round-up” feature. That means if you spend $10.23 at the grocery store, 77 cents gets dropped into your Acorns account.
Then, the app does the whole investing thing for you.
The idea is you won’t miss the digital pocket change, and the automatic savings stack up faster than you’d think. For example, we reviewed how Penny Hoarder Dana Sitar was able to save at a rate of $420 a year!
At that rate, you could set aside $1,000 in about two and a half years — without trying.
The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
6. Get a Better Credit Card
If you’re not using a rewards credit card for everyday purchases, you’re missing out on free money.
You just have to be sure you don’t get too carried away with those purchases — and that the card is paid off at the end of each billing period.
Here’s an option we like: It’s the Chase Freedom Unlimited card. Its claim to fame? You’ll earn an unlimited 1.5% cash back on all your purchases. Plus, if you spend $500 in your first three months of opening the card (hi, groceries), you’ll pocket a $150 bonus.
There’s no annual fee, and the cash-back rewards don’t expire. We checked Credible’s annual rewards calculator, and it estimates $417 in annual rewards based on our spending habits.* (You can enter your unique spending habits and see what you’d earn, too.)
Get signed up — and 0% intro APR for 15 months — here.
*Annual Rewards amounts will change based on the amounts you enter. The monthly spending category names and definitions may vary among issuers, and categories may not align one-to-one.
The information for the Chase Freedom Unlimited card has been collected independently by The Penny Hoarder. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. The Penny Hoarder is a partner of Credible.
7. Get a Piece of the Real Estate Action
What’s the most adulting thing you can think of?
Stumped? OK, here it is: Investing in real estate.
The cool news is you can start investing in real estate without having to play landlord, and we found a company that helps you do just that.
Oh, and you don’t have to have hundreds of thousands of dollars, either. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.
Katie Smith, who recently graduated from Georgetown University in Washington D.C., has always been a saver.
But after years of watching her carefully tucked away funds sit in a low-interest savings account, Smith decided it was time for her money to start making more money — so she decided to invest it in real estate through a company called Fundrise.
While she technically only needed $500 to get started, Smith decided to invest a little more than that. “It’s a pretty low barrier to entry in terms of the amount of money you need,” Smith said. “I invested a couple grand, and I’ve been really pleased with the results.”
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
“I can go into my Fundrise account and see what I actually own,” Smith said. “I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast. Bits and pieces of apartment complexes in Texas and Denver, a construction loan, a mixed-use property.”
8. Negotiate Everything — Especially Your Bills
Listen, at 45, you’ve probably made your mind up. You’re either all about those streaming services, or you couldn’t imagine a world without your favorite cable TV shows. But the price of internet and cable just seems to get higher every year.
You’ve probably heard that calling your cable or internet provider can result in having your bills lowered, but if you’ve ever actually acted on that info, you know how long you can sit on hold — and how incredibly frustrating it can be.
That’s why it’s time to call in a robot.
The negotiation bot Trim will negotiate your cable or internet bills down for you.
It works with Comcast, Time Warner, Charter and other major providers.
You can sign up simply with Facebook or your email address. Then, upload a PDF of your most recent bill, and Trim’s AI-powered system gets to work. If at first it doesn’t succeed, it’ll keep negotiating until it can save you some money.
Also, if you have any outages, Trim believes you deserve a credit, and it’ll handle that for you.
Trim takes 25% of the savings tab, and you get the rest.
9. Give Your Retirement Fund A Boost
OK, so you have a 401(k). And if you’ve been paying into it diligently since you landed your first entry-level gig so many years ago, you’ve probably amassed a nice little retirement fund.
Now, you just need to make sure it’s doing what you need it to. But tapping into that account and deciphering the information — or lack thereof — can be hard.
Luckily, there’s a robo-adviser for that.
Blooom, an SEC-registered investment advisory firm, will optimize and monitor your 401(k) for you.
In 2016, at age 26, Kelsey Buxton opened a 401(k) account for the first time, and soon learned that her projected retirement age was 70 (ouch).
She knew if she wanted to bring that number down, she’d have to get smart about investing and managing her 401(k) — but she quickly realized she didn’t have the time or knowledge required to manage it herself.
“All of the funds and stuff can get overwhelming, so I like the idea of having someone manage it for me,” Buxton said.
Blooom gives you an initial 401(k) checkup for free, and you’ll get to know your account a little more intimately. Find out if you’re paying too many hidden fees, have the appropriate amount invested in stocks versus bonds, that kind of fun stuff.
After that, the tool is $10 a month to use to continue to monitor your retirement account. Penny Hoarders get the first month free with the code PNNYHRD.
10. Get Smart About Shopping
By 45, you’re probably a shopping pro — no denying that. But what if you could go from a shopping pro to a shopping expert?
By simply saving your receipts, you can start earning cash back when you shop. And if earning money every time you walk into Target doesn’t scream, “I just leveled up in adulthood,” I don’t know what does.
If you’re not earning cash back when you shop, you’re basically missing out on free money.
We know it sounds strange, but Ibotta will pay you cash for taking pictures of your grocery store receipts.
Here’s how it works: Before heading to the store, search for items on your shopping list within the Ibotta app. When you get home, snap a photo of your receipt and scan the items’ barcodes.
Plus, you’ll get a $5 sign-up bonus after uploading your first receipt.
Don’t feel like leaving home? No worries. You can earn cash back online when you shop through Ebates, a cash-back site that rewards you nearly every time you buy something online.
We love it around here, because it’s an instant way to save on everything you buy. For example, Ebates gives you 10% cash-back on online purchases at Walmart.
Plus you’ll get a free $10 gift card to Walmart for giving the site a try.
To earn your gift card:
- Sign up for Ebates with your email or Facebook account.
- Use the Ebates portal the next time you need to buy something. It’s connected to thousands of stores, including Walmart, Amazon and Target. You’ll need to make your first purchase through the site within 90 days and spend at least $25.
- Your account will be credited with rewards points you can cash in for your $10 Walmart gift card.
11. Protect Your Home and Belongings
You’ve worked hard and for a long time to create your home. The stuff you’ve accumulated, whether you rent or own a home, is worth protecting.
If you have homeowners or renters insurance, you might be paying too much for it. Try shopping around.
If you’ve never looked into it, start by getting a free quote.We recommend the online insurance company Lemonade, through which renters insurance starts at $5 a month and homeowners insurance starts at $25 a month.
Beyond affordable rates, Lemonade adds a layer of transparency you don’t often see in the insurance world. Instead of profiting extra when it doesn’t have to pay out claims, the company keeps a set 20% of your premium for itself, and 80% goes into a pool for paying claims. Money left over after paying claims each year goes to a cause of your choice.
That also means Lemonade isn’t going to be super stingy about granting customers the claims they deserve — ’cause the money isn’t going into its pockets.
Lemonade is available in Arizona, California, Connecticut Georgia, Illinois, Indiana, Iowa, Maryland, Michigan, New Mexico, New York, Nevada, Oregon, Pennsylvania, Texas, Ohio, Rhode Island and Washington, D.C.
OK, so now that you know Lemonade has your back, here’s how to get a free quote. It’s easy — and you can do it all online. (Nope, it won’t hurt your credit score!)
- Click “Check Our Prices.”
- Get to know Maya, Lemonade’s chatbot. She’s nice and will ask you a few questions.
- Once you complete the application, you’ll receive a quote within a minute or two.
It’s easy-peasy, lemon-squeezy. Plus, at the end of the day, you’ll feel better knowing your hard-earned belongings are insured. After all, when life hands you lemons… (OK, we’re done.)
12. Start a Budget. All the Cool Kids Are Doing It
Budget. There. We said it, and it wasn’t so bad, was it? Budgeting can be a little scary, but it doesn’t have to be. And… we all need it.
The first step is to find out how you’re doing now. Luckily, you can have a financial assistant right in your pocket to help you out.
The Empower app is a powerful budgeting tool that can help you figure out how you’re spending your money and develop a budgeting plan to keep you on track.
Link the app to your bank accounts, and it will track your spending. It will also categorize your spending so you can see exactly where you are overdoing it. That’s right: It will show you just how many times you went out for dinner because you didn’t want to do the dishes.
Set a monthly spending limit and the app will show you a graph that can tell you in one snapshot just how you’re doing for the month. Are you over the line or under it? It’s that simple to see how you’re doing so you can adjust your spending accordingly.
How can your 40s not be great with all of this cool technology?
13. Get Rewarded for Paying Your Bills on Time
Your mom probably gave you an allowance for washing the dishes and sweeping the floor when you were a kid. Now all you get for doing it is a kitchen that’s clean for, like, 15 minutes.
As an adult, you don’t typically get rewards for doing things that are expected of you… until now.
This app kind of rules them all: MoneyLion, a free all-in-one app for managing your personal finances.
MoneyLion offers rewards to help you develop healthy financial habits and will literally pay you for logging onto the app.
You can earn points in the rewards program by paying bills on time, connecting your bank account or downloading the mobile app.
You can redeem those points for gift cards to retailers like Amazon, Apple and Walmart.
If credit cards aren’t your thing, MoneyLion is like having a rewards credit card without the temptation to overspend.
The app also connects with all your bank, credit card, student loan and other financial accounts. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.
14. Get a Grip on Your Credit Score
Your credit reports are basically the Holy Grail of your finances — and your life.
Financially, they can influence many of your big life decisions, like buying a house or a car. These decisions can become a whole lot more difficult if your credit reports have an error.
This is easy to prevent, though, especially if you just check in on your credit reports (you’ve got three major ones) every so often.
One option is to use a free app like CreditWise® from Capital One®. There, you’ll get a free TransUnion® credit report, which you can review for signs of error, theft or fraud. It’ll even give you personalized suggestions to help you improve your credit score.
15. Get Some Help Paying Your Credit Card Bills
Carrying more than one credit card balance can feel a bit like herding cats. Just when you think you have one under control, you realize you’ve let a different one slip away.
High interest rates and late fees can make it feel like you’ll never get those bills under control.
That’s where Tally comes in. It’s a simple app that lets you store and manage your credit card payments in one place, optimizing the amounts and times.
Simply download the iOS app, scan in your credit cards, and if you qualify (with a minimum credit score of around 675), Tally will give you a line of credit with an interest rate between 7.9% and 19.9%* and use the lower interest rate to make managing your payments easy.
No more missed payments. Lower interest rates. All in one place. And don’t worry, Tally uses bank-level security, so your information is safe.
Tally is currently available in Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Oregon, Texas, Utah, Washington and Wisconsin.
*Your APR (which is the same as your interest rate) will depend on your credit history and varies with the market based on Prime Rate. Accurate as of July 2018.
16. See if You Can’t Cut Back on Your Monthly Bills
It’s important to make sure you’re getting a good deal on any product or service you use, and this is a lot easier than you might think.
Hop on Squeeze, a website that allows you to compare rates for mortgages, auto loans, student loans, renters insurance, and mobile and internet plans (among others) for free.
Say you want to compare internet prices. Based on your location, the site aggregates all your options and shows you companies alongside price points and download speeds.
17. Refinance Your Mortgage for a Better Interest Rate
If you’re about to hit 45, you’re probably at a point in life where you’re hearing your friends talk about refinancing their homes and thinking, “Wait, is that something I should do?”
If you’re still paying interest on your mortgage at an old rate, refinancing could help you take advantage of better interest rates and save thousands of dollars over time.
But getting a new mortgage can take months and can be a hassle — and it’s enough to make you throw your hands up in defeat and just go on living with the uncomfortably high interest rate from years ago.
And… you might find out in the end it’s not even worth it.
Before you take the leap, we found a company that wants to help you avoid a common mortgage mistake.
18. Get Some Passive Income
Passive income is exactly what it sounds like: income that comes to you without you lifting a finger — at least, after the initial setup.
While you can’t expect free money to just appear in your bank account, you can take steps to set yourself up with a cash flow that comes in automatically with little to no upkeep.
Why is it important to have a source of passive income? Well, Brad Hines, who estimates 10% to 15% of his income is passive, puts it this way:
“When zero of your money is passive income, that inherently means every minute you’re not working, you’re not making money.”
To make the most of your down time — like that big trip you’ll take to celebrate turning 44 — set up a passive income stream of your own.
Passive income sources can range from really big (think: owning a business) to really tiny (think: owning a gumball machine).
If you don’t mind the initial work of setting up your passive income streams, the payoff and peace of mind can be sweet.
19. Start Saving to Send the Kids to College
If you already have kids, you know just how expensive they can be. If you think it’s bad now, just wait until tuition, rent and all of the other bills that come along with college start rolling in.
Whatever your situation, it’s time to start thinking about saving for your kids’ futures.
It’s important to think about all the ways you can save for your child’s future, such as a low-risk savings bond or a 529 plan to cover college expenses. Why?
Because if they don’t go to college, they may still be living with you. Forever. For. Ever.
20. Build Healthy Habits for Life
Sure, you’ve made it to 45 without paying much attention to what you eat or how often you work out. But sooner or later, you’re going to have to get some healthy habits in place.
In 2016, Teresa Suarez was frustrated by the thought of a possible future in which she continued to ignore her health — and by her own lack of motivation.
“I knew I could be at 300 pounds within months,” she recalled.
So Suarez signed up for HealthyWage — a company that will literally pay you to lose weight.
She bet $125 per month that she would lose 60 pounds in six months. When she achieved that goal, she won a whopping $2,415.28 — more than tripling her initial investment in herself.
Betting on herself and knowing she would lose the money if she didn’t follow through was the kickstart Suarez needed to actually make lasting lifestyle changes.
Here’s how it works:
- Read our full HealthyWage review, and sign up.
- Define a goal weight and the amount of time you’ll give yourself to achieve it.
- Place a bet on yourself ranging from $20 to $500 a month.
Depending on how much you have to lose, how long you give yourself to do it and how much money you put on the table, you could win up to $10,000!
45 Is the New 45
What? You thought we’d say 30? Come on, you don’t want to be 30 again! You’ve accomplished too much and learned so much since then. You’re not getting older, you’re getting smarter. These smart money moves will prove it.
Just watch. Over the next 10 years, these moves will make your life easier and help set up your finances to be looking pretty when you’re approaching that *gulp!* mid-50s mark.
Just don’t go and spend your savings on a midlife crisis hot rod.
This content is not provided by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser. This site may be compensated through the bank advertiser Affiliate Pro.