10 Financial Tips For Your 40s: Living The Good Life - Bitter to Richer (2024)

Your 40s are when you can really enjoy all the work you did in the previous decades. Plus, if you took care of your finances in your 20s and 30s, you’re still young enough to really enjoy it! In your 20s you hopefully had fun and explored, but also laid the foundation for your personal finances. Your 30s is where you really started to see the fruits of your labor, which only encouraged you to keep going. Your 40s is where you can really cement things down and take your foot off the gas. Without further ado, let’s dive into 10 financial tips for your 40s that can have a major impact on your future!

1. Check If You’re On The Right Track

If you’ve slacked off in the past – that’s okay. It’s never too late to get your personal finances in order, so let’s start now if you haven’t before!

Your 20s

Your 20s are a great time to have fun and enjoy life. At the same time, it should also be when you’re laying the foundation for your future. Some extra work, plus some extra investing, can save you a lot in the future. Things that seem small now have a way of spiraling into something much bigger in the coming decades – and that has perks as well as negatives.

You can see my tips for your 20s in this article. If you didn’t spend your 20s in the best way, it’s not too late. Check out the tips for your 20s and look at what you can fix or work on improving!

Your 30s

In your 30s, you should’ve started capitalizing on the foundations, which would’ve catapulted your financial security. It was likely a period with tons of opportunity, which you can read about out here.

2. Beef Up Your Emergency Fund

Emergency funds are a must. They protect you from disaster and can help you avoid taking on more unnecessary debt. Your best bet is to build up a strong emergency fund, probably using a savings account with a high interest rate like the one Axos offers.

Based on your specific case you may want to save 6 months worth of expenses, but possibly even more. In your 20s and 30s, 6 months worth of expenses may’ve been enough. In your 40s, depending on your bills and how close you are to retirement, you may decide to beef your emergency fund up a bit, to something more like 12-18 months worth of expenses.

3. Look Into Eliminating All Debt

In your 20s and 30s, hopefully you got rid of the high interest debt. Now, if you have any lingering debt, it might be time to get rid of it. If you have low-interest rate student loans still, you could knock them out. Alternatively, you could start working on paying off your mortgage early. This isn’t a must, but it gives a lot of people a nice peace of mind that is hard to put a price on.

4. Finalize A Retirement Plan

You should’ve been taking advantage of your IRA and 401(k) options in the past. If you were able to save a lot for retirement, you may’ve even used a standard account with a brokerage – that is, something that isn’t a retirement account. If you haven’t taken advantage of those standard accounts, it’s time to do so now. Hopefully there will be enough in there so that you can retire early without withdrawing for your 401(k) or IRA prematurely.

Accelerate If You Need To

If you’re behind, or want to retire early, do your best to accelerate towards your goals as much as possible. Also, it pays to plan out a cash flow strategy ahead of time, which may help you retire even earlier!

5. Update Your Estate Plan

At the end of the day, estate planning is an absolute must! Making an estate plan sets up your family and is a good way to get your finances in order. On top of that, it gives you a clear insight into the current state of your finances and can give you a nice idea about where you need to end up. Therefore, I consider this a must in your 30s as well as your 40s – especially if you have a family. If you did it in your 30s, hopefully this is just a few minor updates.

6. Enter The Twilight Stages Of Your Career

Now is the time to enjoy your career. Your salary will likely peak, if it hasn’t already. There are many stages in your career, but this is the one where it’s easy to just coast. Of course, you can keep grinding and working your way up, but if you need to slow down that is also fine – it could even let you pursue other interests and side hustles.

7. Monitor Your Health

Hopefully you laid the groundwork in your 20s and 30s, so that you can stay healthy in the future. Exercise, build a home gym, eat healthy with budget-friendly meals, and so on. Even if you slacked off previously, it’s still a good idea to take your health seriously now. If you have always been on top of it, then keep at it! Your future self will thank you, and it can give you the energy you need to stay engaged in all aspects of your life.

8. Help Your Kids

I have always been of the opinion that you need to focus on your own financial security first. However, if you and your spouse (if you have one) are both set up nicely, then it’s always great if you can help your kids. Obviously you don’t want to spoil them, but giving them a nice boost and opportunities can make a world of difference down the road for them. It’s obviously a luxury if you can help your kids, but it’s wonderful to take advantage of if you can.

9. Build A Legacy

Now that you’re getting older and in your 40s, it’s time to think about your legacy. This goes beyond simple estate planning. What do you want to leave behind? What’s the real impact you want to have on your loved ones? Knowing that can help you figure out what you want to do and focus on for the rest of your life. You’re moving into a stage where you’ll have more money and freedom than ever before, so you should take advantage and appreciate it.

10. Live A Little

Which brings me to my final tip. Enjoy the fruits of your labor and live a little! It’s nice to leave behind money for your family, but don’t get so caught up in stockpiling money that you forget to live in the moment sometimes and have some great experiences. I know in the personal finance community that it’s easy to forget that, so we push ourselves too hard sometimes, but it’s crucial to enjoy the little things and have some fun along the way.

Conclusion

Hopefully this gave you some ideas about how you can enjoy the fruits of your labor and build off of your foundations. If you have any thoughts or tips of your own, be sure to let us know in the comments. For more content like this, and a free budgeting template and financial goals worksheet, be sure to sign up for the Bitter to Richer newsletter!