Starting in your 40s? Still not too late
The third in our new series here at RetireJapan. Over four weeks we'll be looking at personal finance for people in their twenties, their thirties, their forties, and their fifties.
If you're the wrong age for today's post feel free to read along anyway -you can chime in and correct my mistakes :)
Now, the problem with getting started with personal finance in your 40s is that for most people, that is precisely when their expenses are highest.
Strict disciplinarian Mister Money Mustache would probably say that just gives us more opportunities to cut wasteful spending.
In reality though, finding money to save when you are paying for kids and houses and dogs and cars and aging parents can be tough.
Additionally, time is no longer completely on your side. You only have a couple of decades until normal retirement age, so you are going to have to save more and rely on compounding interest less.
In other words, this is serious. Much like an MMM debt emergency, if you are in your forties and haven't started saving for the future, you have a savings emergency.
This isn't a 'maybe I should start thinking about this at some point' kind of situation. No, it is more like a 'this should be one of my biggest priorities for the next couple of decades'.
I believe everyone should be saving 20-30% of their income for retirement and general financial fortitude, and if you have failed to do so for the last twenty years then you have some catching up to do.
At this point, people will have one of two reactions. Some people will say to themselves, "He's right. I really have to get things together. Where can I start cutting spending to start building up my emergency fund, my savings, my investments?"
Others will say it's too hard, their situation is too precarious, they are already spending everything and there is no fat to cut. They might even get angry and defensive.
I call this the loser response.
The thing is, no one cares about your situation. The world doesn't care. I don't care. I'll be disappointed, but it's no skin off my back if you don't get your financial life in order.
Either you make an effort, learn about personal finance, get advice from people here, change your lifestyle and habits, or you don't. If you don't, you may end up regretting it in twenty or thirty years' time. After all, I suspect you won't be best pleased with your Japanese pension, and expecting your kids to look after you is perhaps a bit optimistic...
Either way its on you.
If you decide to take action we'll be here to help you. Start by reading the first two posts in this series, then read the main pages on the RetireJapan site. If you are really hardcore reading the blog from the beginning will give you a maximum download of information.
Ask questions via the Contact form or in the Forum.
Learning about personal finance has completely transformed my life and made it better in almost every way. I'd like to help as many people as I can to find the same freedom and security. I don't have all the answers but together we can figure them out.
This might be a good post to share with people around you :)