The financially fabulous 40s

Tess Vigeland: So... 40 is the new 30, right? Life begins at 40 and all that? Well, commentator J.D. Roth could not agree more. And we asked him to give us a sense of what makes the 40s so financially fabulous -- at least, for him.

J.D. Roth: Here's a confession: The best thing about being in my 40 is I don't worry about money. But I didn't get there overnight. I used to worry about money a lot.

In my 30s, I was careless with cash and credit. I bought whatever I wanted -- usually computers and comic books -- and I never thought about the future. I was the proverbial grasshopper. I sang the summer away while the ants saved for winter. And guess what: I racked up more than $35,000 in debt by the time I was 34.

Eventually, I realized I needed to stop worrying and do something. I paid off my debt. I changed careers, and I stopped comparing myself to my friends. Now that I've reached my 40s, my financial life finally seems stable -- solid, even. It took a while, but I've made the transition from grasshopper to ant -- from spender to saver.

And it's a transition that many of my friends have made too. I hear the same stories from them. We did the things we thought we were supposed to do -- buy a house, buy new cars, have kids -- but now that we're entering middle age, we care less what other people think. It's more fun to follow our own goals. And many of us are discovering that we have enough: We've already bought everything we need, and we realize it's senseless to buy everything we want.

It probably helps that most 40-somethings earn more money than they did in their 20s and 30s. Often a lot more. Still, our extra income is being poured into Roth IRAs and 401(k)s. Why? Because we failed to think about retirement in our 30s. So, now we feel pressure to save as fast as we can. We're making up for lost time. So, when you hit your 40s, your lifestyle really doesn't change much. Well, except for kids.

Most people my age have children, and these kids are getting older -- and more expensive. Then there's the cost of college. Some folks are faced with a tough choice: Do I save for retirement? Or do I help put my kids through school? The lucky ones can do both.

I think it's ironic, really, that in our 40s, we're more focused on the future than we were in our 20s and 30s -- back when we actually had more of a future to focus on.

Vigeland: J.D. Roth writes about personal finance at GetRichSlowly.org.

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I am happy to hear that there is life after 40, a good life. I was afraid that if I did not start saving now, I might be headed for a world of hurt. In your 30s, many are still a little bit green behind the ears. (I speak from experience) like you. Now I know what I want out of life and with my experiences, I am ready to play it smart. http://yardsales.com

I put myself through a state University and it was really hard. Especially when I saw my parents being frivilous with their money, while many of my friends' parents were making hard choices to help pay for their schooling. I do think it made me appreciate it more, but it added a lot of stress because in CA the cost of living is high so paying for rent was my largest problem, as I worked hard to get scholarships to cover tuition.

Don't choose paying for kids' education instead of retirement, but realize that college tuition has gone up at 2x inflation, not to mention the stagnant wages over that same time frame. So, when my parents said to me "we paid for our college so you should be able to" it didn't help because the ratios of college cost to possible income are much worse now. I still think my parents are selfish and I lost a large amount of respect for them because of their choices. If you really can't afford to help them, that fine. But you should be willing to make sacrifices to help them, cuz your relationship with your kids is worth it, not to mention their future. But make them work and make them do well and apply for scholarships and whatnot, just help them out as much as you can.

@ Carmen Zepp -

I couldn't agree with you more.

I fully expect my kids to work & help pay for their higher education.

My husband and I did it. And, it was not the student loan debt that hit our finances the hardest after finishing college, it was the dumb decisions we made with plastic...)

We "half-joke" with our 5 & 7 year old kids that the "saving" portion of their current allowance is for college. :D

As to the college v. retirement issue, those of us who put ourselves through school have been telling our children the entire time "I'm not paying for you to go to college, so you'd better work on making good grades and saving your own money!" I have absolutely zero evidence (except my own experiences) as to the effectiveness of this approach, but I'd be willing to place a bet that people who are forced to fund their educations themselves take the experience much more seriously than the kids who are partying it up on mom and dad's dime.

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