By Solid Serenity Legal Solutions
For those of you in your 40’s to early 50’s, known as Generation X, your financial situation can be hard to focus on as you try and take care of both your children and your parents.
In the midst of caring for everyone else, Gen Xers must make the time to look at your own finances and make sure you are staying on top of your savings for retirement so that you have what you need for your own future.
(1) Determine Your Financial Health
To determine your financial health, start by establishing your net worth. This includes savings, personal investment accounts, retirement plan accounts, and the value of real estate you own, then subtract any credit card, mortgage, or miscellaneous debt. Don’t include in these calculations items that won’t appreciate in value such as a car or jewelry.
(2) Identify Your Current and Projected Expenses
Most people underestimate their expenses, but having a good grasp on where your money is going is an important part of preparing for your financial future. One way to make keeping track of your expenses easier is to use online applications made for budgeting such as Mint.com.
These applications provide accurate and efficient results and allow you to go in and change things as needed. After getting your current expenses registered, you can use a retirement calculator to see if you are on track to reach your retirement goals. If you aren’t, meet with a financial advisor as soon as possible to set a plan to reach your goals.
(3) Develop a Contingency Plan
A majority of the Gen X population have not prepared necessary legal documents such as a will or guardianship arrangements for any minor children. Barely more than half carry enough life insurance or disability insurance during a time they are most likely to have children at home. Reach out to your financial and legal advisors to get your plans in place.
(4) Evaluate Resources Available for Your Children’s Education
You should never put your retirement plan in jeopardy by committing to expenses you cannot afford. This includes paying for your children’s college. It’s important to have realistic conversations with your children about what you can contribute to their education. These conversations are necessary to set up appropriate expectations. Even if you can afford to pay for you children’s college, having your child apply for as many scholarships as possible allows you to put more money towards retirement and other expenses.
(5) Understand Where Your Parents Stand Financially
Talking to your parents about their financial situation can be an awkward topic, but it is a necessary one. Talking with your parents about their financial well being provides two benefits.
First, you are able to get a grasp of what kind of expenses may end up falling to you if your parents’ finances come up short so that you are not caught off guard by unexpected expenses. Second, is that understanding your parents’ finances helps you to know where to find vital information to help you save valuable time in the future.
While looking after your children and parents should be a priority, make sure that you are still taking care of your own financial well-being. Review and update your plans with your financial and legal advisors today!