4 Tips to Help 40-Somethings Make Ends Meet

Your 40s can be a tough decade. You may well be in the throes of the sandwich generation, taking care of both your aging parents and your college-age children. If you involuntarily lose your job in your 40s, it might take a long while to find another similarly paying one, and you may have to restart your career at a lower rung on the ladder.

Those factors make it critically important for 40-somethings to make ends meet, and these four tips can go a long way toward helping you get there.

4 Ways to Make Ends Meet

Tip 1: Make the tough priority calls for your dependents. In your forties, there are likely a lot of people depending on you, but your income only goes so far. To make your own ends meet, you need to be willing to say no or to insist on less expensive ways to cover their needs.

For instance, if your parents are relying on you to help them make their own ends meet, it may be time for them to sell their home and move in to lower-cost, senior-friendly housing. If you're physically taking care of them, it may be a lower total-cost option to sell their home, use some of the proceeds to add a "parents' suite" to your own place, and cut down on some of the overhead. (Check with a tax adviser before doing that, though -- it may trigger a gift filing requirement or gift taxes.)

When it comes to your kids, there's nothing wrong with a couple of years of community college before going off for that four-year degree. On a related note, in-state four-year public universities may well provide a great education for a far lower price tag than alternatives. There's also ROTC, internships, co-ops, summer jobs, campus jobs, scholarships, loans, grants and other alternative funding available.

In addition, real-world experience counts for a ton when it comes to finding work after graduation. Many employers would rather hire a "B" student with solid work experience and a proven dedication to getting real-world problems solved than an "A" student with no outside-the-classroom experience. In that regard, work, in addition to helping fund an education, can also help your child go a long way toward being employable after that education is complete.

Tip 2: Review and cut your own spending everywhere you can. As you're asking those who love and depend on you to sacrifice, the more you model that behavior yourself, the more palatable it is to everyone involved. Plus, every dime you cut from your own expenses is a dime closer to making ends meet.

By the time you've reached your forties, you may have let some convenience expenses slip into your budget, like eating out instead of cooking, using a lawn service, and hiring out basic home maintenance. Taking back those activities can be a great way to invest a little time to get back a whole lot of money. In addition, ask yourself what you're spending money on that you can simply live without, and then make the choice to rid your life -- and pocketbook -- of that distraction.

On a similar note, if you've gotten in the habit of simply paying your bills and auto-renewing services as they come due, you may well have the opportunity to save money by taking the time to negotiate. Trash pickup, Internet service, car and homeowner's insurance, cellphones, credit card interest rates, and newspaper and magazine subscriptions -- all of these and more can be negotiated and could potentially result in significant savings to you with no real loss in service.

Tip 3: Tackle your debts and other anchors holding you down. If you're in your forties with debt, you likely have quite a reputation for your ability to pay back that debt on agreed-upon terms. Either you've been really good with your debt service or you've had some challenges. No matter which it has been, if you're having difficulty making ends meet, that debt needs to go.

The first step in eliminating your debt is to call your creditors and ask them to lower your interest rates.

If you've got a great payment history, you likely get low-rate transfer offers in the mail on a regular basis. Leverage those when talking to your current creditors, who'd likely rather get some interest from you rather than no interest from an immediate payoff. If your payment history is spotty, call and ask anyway -- your creditors may be convinced that lower rates will give you more breathing room to avoid bankruptcy.

Once you've got your interest rates lowered as far as you can, line up all your debts in order from the highest interest rate to the lowest interest rate. Pay the minimums on all those debts except the highest interest rate one. On that one, pay as much above and beyond the minimum as you can, until it zeroes out. Then take all the cash you had been paying toward that now extinguished debt and add it to the payment amount on the new debt to take that highest interest spot.

Repeat the process until every last debt you owe is extinguished (with the possible exception of your mortgage). That payoff process is often called a "debt snowball," and once you've finished it, you'll free up all the cash you had been paying toward your debt service; a great boost toward helping make ends meet.

Tip 4: Leverage your expertise to earn some extra cash. Ultimately, making ends meet is based on having enough income to cover your expenses. By the time you've reached your forties, you've likely built up an impressive skill set and mastery-level expertise in your chosen career field. You can use that expertise to your advantage by setting out a shingle and hiring yourself out for contract work in your off-hours, above and beyond your regular job.

That extra money can go a long way toward helping you make ends meet, but where it's really powerful is in speeding up your debt snowball. That extra income can help you extinguish your debt faster, and then, once you're completely debt-free, it'll be all that much easier to make ends meet on the check from your regular job.

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Following these four tips can get you to the point where you're reliably making ends meet today and well on the path toward financial freedom for the rest of your life. Perhaps best of all, you'll quickly notice the improvement. Once you reach the point where you're reliably making ends meet, you'll feel like a huge weight has been lifted off your shoulders as the financial stress melts away.

Chuck Saletta is a Motley Fool contributing writer.