The popular term ‘midlife crisis’ celebrates its 51st birthday this year since its coinage in 1965 by the late Canadian psychoanalyst Elliott Jaques. Having said this, it is important to note that how midlife crisis has a serious impact in all our lives as we close in on 40. It gets severe as we progress further. Most of us happen to ignore its implications when our financial stability is not in question but for those who are yet to plan their financial life or struggling to make sense of our income and expenses, it will be prudent not to delay further. Because here are some of the ways by which midlife crisis affects your life-
Loss of Job
Most of us who are in the Information Technology (IT) industry, we are aware of how unpredictable it can get when it comes to laying off people. Professionals with 10+, 15+ years of experience are laid off due to so called cost management of large corporate. The fact here is since our income is directly proportional to our expenses, a month’s no-salary can seriously affect our financial lives. This gets more severe when we do not have any kind of emergency fund to back up for our loss. And when you are 40 and above, chances of re-employment are fewer, therefore complicating our mid life even more.
AY’s PF Tip: Create an emergency fund of 6-7 months of necessary expenses.
Age Related Ailments
People say that the biggest illusion of our lives is that we are alive. It is like illness is a fisherman casting its net on life and a minute of negligence from health perspective, we are caught in it. We suffer myriad illnesses including cardiac issues, blood pressure, diabetes, kidney problems and scores of them. Adding to the psychological crisis that people already suffer during their midlife, sickness aggravates emotional instability. Imagine now, if you haven’t yet planned your financial life, how difficult does it get to counter such illness? You may prefer ignoring initial threats to your health, but when a member of your family, your dear one falls sick, you can in no way escape the same. And also, you falling sick is not limited to your body but it is a pain for all of them who are attached to you and your well being.
AY’s PF Tip: Get a family floater Health Insurance (spouse, kids & parents) for adequate protection without affecting your savings.
Loss of Spouse
Well this is no stereotyping. There are indeed many family structures wherein women are either not allowed to work outside or women themselves voluntarily decline from working outside to be able to dedicate more time to the nurturing of a family. In such cases, a couple in their mid 40s shoulder maximum responsibilities, that of their aging parents, their adolescent kids and a lot more. Now when the man loses his life to sudden illness or accident, imagine the kind of turmoil the woman has to go through on top of her daily grill and grime? It can be the same agony wherein the woman is the breadwinner as in progressive families. A proper Financial Planning in this regard is indispensable and it should be started as early as one finds an employment in their early twenties.
AY’s PF Tip: A term insurance can help you offset this emotional and financial loss.
Now you can let go of anything but even the poorest of a family person will do anything to get their kids rightly educated, I mean, he or she would ensure that the children are given proper education through good schooling. With rising Education inflation and cost of livelihood, thinking of sending children to a good school is an everyday nightmare. Interestingly, it does not end with getting the child enrolled in a school, this ongoing expense increases by leaps and bounds over the years until the child has completed his or her schooling. In foreign countries, children take up part time jobs to support their education, but that is not the case in India where parents can go to any extent to ensure the child is not stressed with anything else that distracts his or her attention from formal education. So the concern is how to tackle this condition with ease?
ArthaYantra PF Tip: Investing in a diversified portfolio for Long term based on your risk profile will help you fulfill educational goals for your children.
It will be unfair to draw any specific conclusion on midlife crisis. The intensity of the crisis is always variable as we live different lives with different financial priorities and obligations. But to stay on the safer side, it is always recommended that one at least takes care of the 4 conditions discussed above. Also, it is not always investment for investment’s sake, to be in control of one’s financial life, it is imperative that a proper risk assessment is done prior to the purchasing of any financial products.