How the “chrysalis mindset” could help you revitalise your finances in midlife

18 July 2024

As you approach your 40s or 50s, have you begun to hear the phrase “midlife crisis” bandied about more often than before?

While friends and family might like to make tongue-in-cheek jokes about buying a sports car or getting a trendy haircut, many people do experience a crisis of confidence when they reach midlife.

After all, if you look back over the last 20 or so years, you might realise that your priorities, goals, and material circumstances have shifted significantly. If this leads you to feel insecure or worried about your choices and your future, especially where money is concerned, don’t panic – you’re not alone.

One way to feel more confident about your future, especially when it comes to your finances, is to adopt the “chrysalis mindset”.

Keep reading to learn what the chrysalis mindset is, and how your wealth could benefit from it in midlife.

The chrysalis mindset involves accepting and embracing a period of change in midlife

The life cycle of a butterfly is one of the most fascinating evolutionary phenomena on Earth.

Starting as a caterpillar, building a protective chrysalis, then emerging as an almost unrecognisable version of itself, the butterfly can teach us a lot about how we progress through our own lives.

In short, chrysalis thinking involves:

• Accepting that your priorities will shift around the midpoint of your life
• Taking the time to reflect and set new or adjusted goals that serve you better.

Of course, these are abstract concepts. You might be wondering: “How do I apply a chrysalis mindset to my finances?”

Here are three key areas of your finances that could benefit hugely from chrysalis thinking.

1. Saving and investing

In your early career years, saving and investing were important actions to take – but you might have considered these habits as “optional extras” that came last on your priority list.

This way of thinking might have been linked to two distinct factors: you were probably earning less than you do now, and you may have had fewer responsibilities then, too.

Today, the picture probably looks a little different. You could be:

• Raising children
• Saving for retirement
• Experiencing your peak earning years
• Living in a larger home with a mortgage
• Supporting elderly parents, either practically or financially.

With all these potential responsibilities on your plate, you might realise that your previous behaviours around saving and investing are not enough to sustain a comfortable life, both now and in the future.

Adopting a chrysalis mindset could help. While life as a carefree “caterpillar” was once perfect for you, it’s time to enter a period of change and growth, which means taking saving and investing to the next level.

To start this change, you could:

• Increase the amount in your emergency fund to between three and six months’ essential expenses
• Make accurate, data-driven investment decisions that are aimed towards your long-term goals
• Talk to a financial planner about adapting your saving and investing behaviours to suit your renewed needs and objectives.

Rather than panicking about what the future holds, chrysalis thinking could help you see your shifting priorities as a natural development that will help you sustain your wellbeing in midlife.

2. Protection

As a young adult, you may not have asked as many “What if?” questions as you do now.

But as you age, these questions may inevitably creep into your mind. What if I become seriously ill? What if I pass away unexpectedly?

If you dwell too much on these subjects without acting on them, you might start to feel overwhelmed. Instead, use their presence as motivation to take stock of your situation, then act to protect your finances.

Research from Forbes suggests that in 2023, only 35% of the UK population had life insurance. But doing something as simple as organising a package of protection, including life insurance, could help you or your family cope in an unprecedented situation.

Just as the chrysalis protects the caterpillar while it undergoes a period of change (which makes it vulnerable to life’s dangers), financial cover could do the same.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Then, when you emerge into the next chapter – retirement – you’ll do so with the knowledge that you have taken the necessary steps to protect your wellbeing in future.

3. Retirement

While retirement may previously have looked like a dot on the distant horizon, you might now have a clearer picture of when it will happen for you and what you want to achieve when it arrives.

Once again, applying your chrysalis mindset to retirement could prevent you from procrastinating and encourage you to spend time thinking about what the next chapter of your life will look like.

While in your “chrysalis” of midlife, reflecting on your retirement plans, you might consider:

• The age at which you would like to retire
• Whether your existing pension contributions are enough to help you meet your target retirement age
• How other savings and investments will help you live comfortably in retirement
• The amount you are planning to leave as inheritance, including any properties you own
• How you’ll pay for later-life care if you need it.

By reflecting on these topics in midlife, when you emerge from your chrysalis and into retirement, you might feel truly confident in living a full, happy life free of unnecessary financial worries.

Get in touch

Our financial planners are well-versed in helping those reaching midlife to realign their priorities and start the next chapter.

To learn more about how we can help you transform your finances, email info@depledgeswm.com or call 0161 8080200.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Your capital is at risk. A pension is a long-term investment not normally accessible until 55 (57 from April 2028).