(Source: www.businessinsider.com)

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By the time you get to your 40s, you’ve checked off a lot of financial firsts.

When you were younger, you might have assumed you’d have everything figured out by now. But as soon as you master one aspect of your money, another challenge — or opportunity — seems to pop up.

Your 40s bring a new set of financial priorities, especially if you have children. Now is the time to start thinking seriously about funding their college education, not to mention teaching them important lessons about money.

In your own life, you might be ready to mix things up — whether by changing your job, your career, or moving to a new house. Perhaps even all three.

Everyone’s situation and needs are different, but one thing is certain: After making it through two decades of adulthood, you’ve definitely earned a vacation. It’s worth adding the dream trip you’ve been putting off for years to your to-do list as well. Just make sure you plan for it — as well as the following top financial priorities to focus on in your 40s — before you take off.

Save for your kid’s college: Before you know it, the bills will begin

The cost of college continues to climb, leaving many families unprepared for what is likely the most expensive investment of their child’s life. Covering every penny isn’t realistic for most parents, but planning ahead can help mitigate future financial pressure.

If you haven’t saved enough, or at all, start by setting a more achievable goal, like aiming to cover a quarter of your child’s college bill. That’s the amount paid on average by parents through savings and income, Business Insider’s Tanza Loudenback reported. Loans, taken on by students as well as parents, account for another 27%, and scholarships and grants cover more than a third.

College savings are best accumulated in a 529 plan, a state-sponsored investment account earmarked for education that offers tax benefits for those who use it. Only 13% of families take advantage of the account, and those who do have average account balances of about $10,000, according to a survey from Sallie Mae.

Saving is just one step of the process, however. Talking openly with your child about the cost of college, and how you plan to pay for it, may lead to more careful decision making about where to go, and how to make the most of the four years. Plus, it gives them insight into how they might want to manage their own money after graduation.

Take stock of your career: If you’re burnt out at work, you’ve got options

It’s never too late to switch careers — plenty of successful people have done it — but before you make a change, it’s important to understand any potential financial repercussions.

Most people hit their peak earning years in their 40s, according to data compiled by Payscale. Going back to square one now could significantly impact your future earning potential. And if your desired career-path requires an advanced degree, that means more years out of the workforce and more money out of your savings.

You might have better luck making incremental or small changes to your career, or looking for a new job in the same field. If you’re burnt out, make sure you’re using all of your vacation days, which can help reenergize you as well.

Earn money on the side: The benefits go beyond the extra cash

Rather than quitting your day job, you might want to turn a hobby into a profitable side business.

Besides the extra money, hobbies can also help improve your ability to think creatively, manage stress, and tackle mentally challenging tasks, Business Insider’s Rachel Gillett reported.

If you love photography, home repair, or even just watching sports, you could earn $10 or more per hour in your free time, doing activities you already enjoy.

You may not make enough to leave your 9-to-5 job behind, but having the extra cash could help you save toward retiring early, or even provide a future source of income when you are ready to retire but don’t want to stop working altogether.

Teach young kids about money: Set them up now for future financial success

The No. 1 money lesson a child needs to learn has nothing to do with dollars and cents, according to Beth Kobliner, personal finance writer and author of “Make Your Kid a Money Genius (Even If You’re Not): A Parents’ Guide for Kids 3 to 23.”

More than anything else, future financial success hinges on understanding how to wait.

“Saving up and waiting for something you want is really the key to money — if you’re able to delay gratification,” she told Business Insider in a Facebook Live interview.

Kobliner recommends helping your child decide to put away a little each day, so they can ultimately afford a bigger goal. “Instead of buying a snack every day after school, you take that dollar and put it into an account, or even put it into a jar in your living room, and save up that money and use it to buy a Lego set … designer sneakers, whatever it is,” she said.

Doing this when they’re young can help develop a concrete sense of how to save money in the long run. According to Kobliner, kids begin establishing lifelong money habits as young as age 7, so it’s never too early to start.

Save for a dream vacation: Stop saying ‘one day’ and start planning to go

There’s no reason your 40s should be all work and no play. Focusing on your financial priorities is important, but so is enjoying the money you work so hard to make.

When it comes to daydreaming about your ideal vacation, stop thinking about “one day” and start taking the steps to turn it into a reality. Some trips cost more than others, but with so many beautiful places to visit, it’s possible to find a destination that fits within your budget.

If your funds and time are limited, don’t forego your vacation completely. In fact, research shows that taking a one-week vacation may bring more happiness than leaving town for twice as long.

Once you’ve set your sights on the place you want to go, open a separate savings account and start setting aside money to make it happen. As soon as you reach your target amount, pack your bags, and go. You deserve it.

Improve your home: Now may be a good time to renovate or trade up

If your once-new home is starting to feel lived-in and cramped, you might be itching to move to a bigger or nicer place.

Mortgage rates are still historically low, and home prices in many areas have returned to pre-crash levels. Now could be a good time to trade up, or at least take on a renovation project that adds value to your current house.

Since you’ve already been through the home buying process, it should be easier this time around. Hopefully you’ve built up enough equity in your current home to afford a 20% down payment.

Just make sure you don’t stretch your budget too far. Keeping your mortgage payment to 25% or less of your after-tax income could mean the difference between contributing to your 401(k)— or not. Having a nice house may make you happy, but not as happy as being financially independent could.

More Info: www.businessinsider.com

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