20 Financial Tips For 40-something Year Olds

By | June 6, 2016

20 Financial Tips For 40-something Year Olds

Have you noticed that when you spell forty the letters appear in alphabetical order? You just went back and checked, didn’t you? Now, when the word itself is in order, how about you follow suit and get your finances in order? You are in your 40s after all.

If you are in your 40s, your financial goals will be a lot different than what they were in your 20s and 30s. If not, then you might want to make some changes. Here is a list of 20 financial to-dos for those in their grand 40s.

  1. What’s The Outstanding Loan Amount?

Get fast and furious on your loan repayment. How much is the outstanding balance? Can you go for pre-closure? Ask yourself these questions. With retirement closer than ever, you have to start working to get rid of all your debt.

  1. Consider Refinancing Your Home Loan

Interest rates are most likely to have changed since the time you took a Home Loan. You can shift the outstanding balance to a different bank for a lower rate of interest. Why continue paying a higher rate of interest when you can make the shift to a cheaper option.

 Additional reading: The Dos And Don’ts For Home Loan Prepayment

  1. How Much Do You Spend On Your Credit Card?

Along with the loans, keep your Credit Card bills in check. Return the cards you don’t use. You can also switch to a rewards or travel card. 40s is all about financial spring cleaning.

  1. Get A Salary Hike

In your 40s, you are a treasure house of experience and expertise. Use this to your advantage and ask for a raise. You deserve it. It wouldn’t be wise to hurt your retirement fund in order to pre-close your loans.

  1. Add Firepower To Your Retirement Fund

Retirement might be at least 20 years away, but these years will fly by. Your 40s is the best age to add some firepower to your retirement fund. Never mind if you have lost the golden years. You can still catch up by upping your retirement savings fund. You will have to shift your focus away from investments to savings. Additionally, you can also open a PPF and NPS account for more savings. You will be thankful for this later.

  1. Do You Need More Retirement Funds?

While you are bulking up your retirement fund, check if one fund will be enough to cover your post retirement expenses. If most of your debts have been paid off, you can think about opening new retirement funds offering better rates of interest.

Additional reading: How Much Do I Need When I Retire?

  1. Don’t Break Your Retirement Fund

There will be many occasions in your 40s when you’ll be tempted to break your retirement fund, such as, to pay for the higher education of your children, their marriages, etc. Resist temptation! If you break your fund now, it’ll be difficult to replenish later.

  1. Start Something On The Side

The hardest part about retirement will be having no job in hand. You can remedy that by starting something alongside your 9-to-5 job, now. Start small and you can expand as the years go by. This will also give a good boost to your finances. You never know, starting a business might awaken the entrepreneur in you.

  1. Learn New Skills

Do you feel your life and career are stagnating? Maybe it’s time to learn new skills. With more skills to boast of, you can explore more career options. How about stepping into the role of a consultant? You have ample experience to boast of and your advice will be sought by many. Moreover, consulting can turn out to be lucrative. If you want to try something new, take up your passion as your new job. You can take tuition classes, open a little nursery. The options are plenty.

Additional Reading: Good Investment Options For Retirement

  1. Plan Your Retirement Job

Now that you are thinking about starting a gig on the side and learning new skills, also think about what kind of job you would like to do in your retirement days. Once you have the answer to that question, you can opt to learn skills to match that goal. Here are 5 things you must do before you retire.

  1. Don’t Fall For The Extravagant Lifestyle

At 40s, you probably have all the resources to afford a glitzy and glamorous lifestyle. But, before you go splurging, remember, you have to sustain your financial independence in your 50s, and later during retirement. Be mindful of how and where your money goes. Don’t get carried away by your higher purchasing power.

  1. Eliminate Bills

By your 40s you are sure to have subscribed to many services. Check how many of these are free and how many paid. May be you can cancel the subscription of some magazines or newspapers. You can also check your internet and phone packages and see if you’re getting the best value for your money.

  1. Take Care Of Your Home

After taking a hefty loan for your home, it hurts to see the walls flaking and the ceiling leaking. Moreover, it costs a lot more to renovate a house than to keep it shape with regular maintenance activities. Give your house timely repairs, else, you’ll be spending your retirement money renovating it.

  1. Look After Your Belongings

Just as you look after your house, look after your other belongings. Less damage means less money spent on repairs and replacement. All this will make a difference to your finances when retirement comes around.

  1. Have You Drawn Up A Will?

If you haven’t, then get one now! A will is the strongest way to secure the future of your family. Once the will is drawn, you can get a lot more adventurous with life.

  1. How Is Your Term Life Insurance Going?

40s is a good age to give your Term Life Insurance Policy another look. You can increase your contributions, or add fringe benefits. These things must be revised from time to time in accordance with your resources and needs.

Additional reading: Online Term Plans In India

  1. Did We Speak About Health?

Health expenses can take a big chunk out of your savings. But, not if you take care of your health. If you are getting rounder at the waist and your knees are giving way; time to reconsider your diet and exercise regime. Would you rather spend your retirement days taking brisk walks or struggling with a cane stick? Oh, and don’t forget your Health Insurance.


  1. Keep Up

The biggest hurdle people face, growing older, is feeling out of touch with what’s latest and ‘in vogue’. One of the biggest challenges lies in dealing with technology. Make sure you keep trying new technologies even if it seems confusing. You’ll get the hang of it sooner or later.

  1. Hire A Financial Planner

In your 40s, you have the resources to hire a financial planner. They’ll study all your financial assets and recommend changes to suit your income, spending pattern, and future needs.

  1. Emergency Fund

An emergency fund is extremely important to meet unannounced expenditure. It allows you to meet unwelcome costs without having to disturb your savings or investments. Start working toward replenishing your emergency fund as soon as you draw on it. In your 40s, you must be extra prompt. Make sure your emergency funds stays well stocked in your 40s. Also look at raising the upper limit. It’ll serve you well.

If you take care of these 20 points in your 40s, you will rock and roll your way to your 50s. So, start now!

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