Remember that putting “fun” into your life balance is key to a healthy life, healthy relationships, and a healthy outlook. It is as important to budget for fun as much as to budget for your healthcare or your child’s car.

“Fun” does not have to be expensive, but it has to be planned for in your budget at whatever level will give you balance. By planning for financial security with a sound budget, you can make these the best years of your life. A budget is simply an evergreen document that gives you a picture of your income and expenses, and helps prioritize both. It changes as your circumstances change.

If you’ve never had a budget, you’re not alone. More than half of Americans don’t use a budget regularly according to the National Foundation for Credit Counseling 2011 Consumer Financial Literacy Survey. As you enter your 40s, you’ve got important decisions and changes to make. In addition to your ordinary monthly expenses, your children may be about to go to college. Your parents may need additional care, and retirement is not very far away. No matter what stage of life you’re in, it’s never too late to begin managing your finances. 

Step 1. Get the big picture first. Determine whether you need a weekly, monthly or other time frame budget based on the regularity of your income and expenses. List all the money you get in a month, from your job or business, interest on your savings and investments and any other payments you receive. List all your expenses, including taxes, housing costs, transportation, food, insurance and health care, debt and utilities. Make allowances for irregular categories, such as entertainment and recreation, clothing and miscellaneous.

Step 2. First place to start: subtract your expenses from your income to evaluate your budget health. Decide what your expense priorities are and calculate the way to get there. Track your spending with the smallest of detail (too often we overlook seemingly insignificant expenditures that end up totaling more than we think). Look for opportunities to shave money off your expenses (bundling in-home entertainment and internet, shopping around for lower-cost service companies, etc.). Start to limit your use of credit to make purchases. Save more money. Consider charitable giving now or as planned giving in your will. 

Step 3. Prioritize the funding of your retirement by increasing your contributions. Place at least 10 percent of your income into retirement savings accounts and max out the contributions allowed through your employer. Talk with a financial advisor about your money needs for the future. Most Americans have an unrealistic idea of how much money they will need to live comfortably in retirement. Aim for about $1.5 million to $3 million in the bank so you don’t outlive your money.

Step 4. Review all your investing alternatives. Determine whether you’re being too conservative or on the other hand entertaining too much risk in consideration of your future financial priorities. Make necessary changes. Talk with a trusted professional help to find out if there’s a way to allow your money to grow — and last longer — without adding too much risk or instability to your investments.

Step 5. Focus on paying down your mortgage. Investment advisors agree that by the time you are in your 60’s your mortgage should be completely paid off. This is the first step in a comprehensive effort to reduce your overall debt load. Spend your 40s eliminating your entire debt burden so you can enjoy your later years.

Step 6. Analyze your insurance needs. Be sure you are budgeting appropriately to cover life, health and long-term care insurance needs. Plan your estate. No matter its size be sure to create a will, decide on power of attorney and set your medical directives. These are important adjuncts to your financial life at this stage. They ensure that all the hard work you’ve done in accumulating wealth doesn’t get intercepted as you progress toward ending your formal work life. They also ensure that your earnings and savings will benefit your loved ones.

Step 7. Budget for fun. Your 40s may seem all about responsibility; you work hard and care for your family. But you shouldn’t neglect yourself either. This stage of life offers an opportunity to pursue put-off passions with the stability you’ve built over time. Create room in your budget for travel, adventure, and that convertible you’ve always dreamed of. Now is the time to enjoy the fruits of your labor.

1. Is there anyone at all on whom you are at least partly financially dependent?
2. What would happen if that person was no longer able to deliver their end?
3. Are you prepared?

Well, contrary to popular belief, sometimes, life does give you a “do-over.” You might call me the women’s financial do-over. But the key to a “do-over,” is to do it over the right way. No matter what your lifestage, there are simple steps you need to follow to plan your financial future… over…

Let’s consider what women should be doing at various points in their life.

For those of you who are in your 20’s

• Remember the “save a penny for a rainy day” mantra, well start an emergency fund – you should have three to six months pay saved up in case you run into financial surprises. Surprises are.. after all… a surprise. But you can be prepared.
• I know you are not really thinking about retirement yet, but if your company offers a 401(k), sign up. Contribute at least the minimum percentage needed to qualify for the full employer match – you will get the most out of your employer benefits this way.
• Be financially prudent. Limit yourself to just one credit card, and pay the entire balance monthly. If you have an outstanding balance on credit cards, pay as much as you can as quickly as possible, starting with the highest interest card first
• Work on paying down any student loan debt
• And check your credit report to make sure there are no discrepancies – you would be surprised what can show up on your credit report that you are unaware of

For those of you in your 30’s

• Take a look at how your 401(k) or IRA money is being invested – a woman at your age may be able to afford more aggressive investments as you have many years before retirement
• If you’re buying a home, put 20% down to a void the cost of mortgage insurance. Your mortgage payment should be no more than 28% of your monthly income. These two benchmarks assure that you buy smartly
• Take out a disability income insurance policy if you don’t already have one, to protect you from the unexpected.
• Work with a lawyer to establish a will, and to address any other estate planning needs you may have. Working on your will is not only a way to address your estate planning, but will force you to answer some questions you don’t even realize are out there.

For those of you in your 40’s

• Review your life insurance policies to be sure you have the right amount of coverage and the right type as your needs may have changed. What we needed in our 30’s is not likely the same as what we need in our 40’s.
• Explore options for long term care insurance – buying young gives you more options for better coverage at better rates.
• Take a look at your 401(k) plan or IRA investments.  Your investment objectives may have changed as your life has undoubtedly changed.  Update your investments to better reflect your goals.
• Give your credit report another solid “once over” to be sure it reflects a true statement about your money management habits.

For those of you in your 50’s

• Revisit your retirement savings goal to make sure it still makes sense, and that you are on the right plan to reach that goal.
• If you are behind on savings, you can catch up by taking advantage of higher contribution limits in 401(k)s and IRAs.
• Review your estate plan to make sure it is up to date with changes in your life and current laws. Confirm you executors are the ones best suited to carry out your desires.

For those of you in your 60’s

• Consider your retirement income strategy. Determine whether you can live off of a small percentage of your retirement assets and continue investing the majority.
• If you earned a traditional pension, compare the payout options and make sure your choice doesn’t exclude you from other retiree benefits.
• Find out when you can receive your full Social Security benefit – you may want to hold off on collecting your benefit up to age 70 to increase your monthly payout.
• Get yourself ready to enjoy your upcoming retirement in every way, not just financially.