6 Money Moves to Make Before You Turn 40 – When you hit 40, it’s a great moment to take stock of your life and all you’ve accomplished, as well as the people you’ve met and the bonds you’ve forged.
For others, though, this can be a period of great anxiety, especially those who don’t have their financial houses in order.
Turning 40 might be a sobering reminder that you’re running out of time to make up for prior financial missteps.
If you want to retire without financial worries, you need to get serious about your finances. For this reason, experts recommend that all adults take a few key financial steps well before the big 4-0.
Establish a well-stocked emergency fund
No matter where you are in life, it is important to have saved money set up for unexpected expenses. However, you should prioritize having three to six months’ worth of living expenses saved up by the time you turn 40.
Also Read: 13 Small Steps You Can Take Now to Improve Your Finances
You might have a house and a car payment by the time you’re 40, among other costs. Therefore, you require safety nets if you are laid off. You should also have some savings if you have to pay for unexpected expenses that aren’t included in your regular income.
Clear up your credit card balances
The interest you pay on your credit card debt increases the longer you let it sit. However, as you advance in years, your priorities may change.
Perhaps you no longer care as much about climbing the corporate ladder as you once did or want to save more money to send your children to college. And if your debt payments consume a sizable portion of your income, you may find it challenging to achieve those objectives.
Getting out from under credit card debt, if at all feasible, before turning 40 is a terrific goal to set for yourself. And if you use a balance transfer or a personal loan to consolidate your debt, you may find it easier and less expensive to repay.
Get serious about saving for retirement now.
Financial independence in retirement is essential for a comfortable lifestyle. The earlier you begin saving in a retirement account or 401(k), the more time your money has to grow through investment. Even if your funds still need work, you should try to get the ball rolling on building a nest egg by turning 40.
Put money into a life insurance policy
A life insurance policy is crucial if you have loved ones who rely on your income. Younger applicants have a better chance of getting a low premium rate. Therefore, it is beneficial to begin researching and requesting prices well before age 40.
Do a will
Even though 40 is still rather young, it’s never too early to make a will. If you don’t have a will, your assets will be distributed in a way you didn’t choose after your death.
Having a will that details a plan for your children’s care in the event of your death is crucial. If you have any pets, the same rules also apply to them.
Get your credit score in good shape.
You should always be prepared to borrow money or renegotiate your mortgage. A high credit score facilitates borrowing money at a reasonable interest rate.
Your credit can benefit from your prompt payment of bills, reduction of credit card debt, and maintenance of long-standing credit accounts (like that credit card you’ve had for 15 years).
At 40, the last thing you need is financial stress, regardless of how you feel about reaching 40. If you can accomplish all of these things before you turn 40, you’ll have even more to be happy about.
