Remember when you thought 40 was old? Yeah, me too.
Now here we are, and honestly, it doesn’t feel that different from 35, except for the fact that my knees crack when I get up from the couch, and I actually get excited about a good mattress sale.
But here’s what does feel different: the weight of knowing that the financial decisions I’m making right now actually matter. Like, really matter. Not in some abstract “someday when I’m older” way, but in a very real “holy crap, retirement isn’t actually that far away” way.
If you’re anything like me, you’re probably making more money than you ever have, but you’re also spending more than you ever have.
The mortgage, the kids’ endless activities (seriously, when did youth soccer become so expensive?), maybe helping out your parents, and that persistent anxiety about whether you’re actually doing this whole money thing right.
I’ve been thinking about this a lot lately, and I’ve realized something: our 40s are kind of like the financial sweet spot.
We’re not kids anymore, but we’re not scrambling to catch up either. We have just enough time to get our act together, but not so much time that we can keep putting things off.
So let’s talk about what actually matters. Here are the five things I think we need to focus on in our 40s – not perfectly, just in a more focused way.
The 5 Most Important Pieces of Financial Advice You Need in Your 40s
1. Stop Messing Around With Your Retirement Contributions
Okay, real talk: remember when retirement felt like something that happened to other people? When you were 25 and someone mentioned a 401(k), and you were like “yeah, yeah, I’ll deal with that later”? Well, later is now.
I ran the numbers the other day, and it kind of freaked me out. If I bump up my retirement contributions by $500 a month right now (at 45), that extra money could grow to over $200,000 by the time I’m 65. But if I wait until I’m 50? Only about $130,000. That’s a $70,000 difference for procrastinating five years.
Look, I get it. Five hundred dollars a month sounds like a lot when you’re already feeling stretched thin. But here’s the thing – this isn’t just about the money. It’s about knowing you’re actually doing something about that nagging voice in your head that whispers, “What if I can’t afford to retire?”
How to get started:
- First, make sure you’re getting your full employer match. If you’re not, you’re basically turning down free money, and that’s just silly.
- Then, try to max out your 401(k). For 2025, that’s $23,000 a year, which breaks down to about $1,917 a month.
- Don’t forget about IRAs – you can put in another $7,000 a year, even if you have a 401(k).
- If you’re over 50, there are these things called “catch-up contributions” that let you put in even more. It’s like the government saying, “Hey, we know you’re behind, here’s some help.”
2. Get Rid of That Credit Card Debt (Yes, All of It)
I have a friend who’s brilliant. Like, actually brilliant. She’s a doctor, makes great money, has her life together in every way except one: she’s been carrying a $15,000 credit card balance for three years. Three years! At 20% interest!
I did the math for her (she didn’t ask, but I’m helpful like that), and she’s paying about $3,000 a year just in interest. That’s a nice vacation she’s giving to the credit card company every single year.
Credit card debt is like that friend who overstays their welcome – it seems manageable at first, but it just keeps growing and taking up more space in your life. With interest rates around 20% these days, you’re essentially paying a penalty on money you’ve already spent.
How to get started:
- Pick a strategy: pay off the highest interest rate cards first (saves more money) or pay off the smallest balances first (feels better psychologically). Both work, so choose whichever one you’ll actually stick with.
- Look into balance transfers or personal loans if your credit is decent. Even getting your rate down to 10% or 12% can save you thousands.
- Write down your debt payoff plan. There’s something about seeing it on paper that makes it feel more real and achievable.
- Throw any extra money at it—tax refunds, bonuses, that $200 you got for selling old stuff on Facebook Marketplace.
Aim to be credit card debt-free within the next year or two. Trust me, the relief is worth it.
Snowball, Fireball & Avalanche: 3 Powerful Debt Payoff Methods to Help With Yours
3. Protect What You’ve Built (Because Life Happens)
When I was in my 20s, I was basically indestructible. I could eat pizza for breakfast, sleep on a futon, and bounce back from any financial setback in a few months. Those days are over.
Now I have a mortgage, kids who depend on me, and a lifestyle that requires a steady paycheck. One job loss or serious illness could mess up everything I’ve worked for. That’s not being negative – that’s being realistic.
How to get started:
- Build up an emergency fund with 3-6 months of expenses. Yes, it’s boring. Yes, it earns less than your investments. But it’s not supposed to make you money – it’s supposed to help you sleep at night.
- Check your insurance. If people depend on your income, you probably need term life insurance (8-10 times your annual salary is a good rule of thumb).
- If you’re self-employed, don’t forget about disability insurance. You’re more likely to become disabled than to die during your working years, which is a cheerful thought.
- Set up automatic transfers to your emergency fund, even if it’s just $100 a month. It adds up, and more importantly, it builds the habit.
4. Start Planning for the Big Stuff
Your 40s are when all those abstract future things start feeling very concrete.
If you have kids, they’re probably starting to think about college (and you’re starting to panic about college costs). If you want to retire early, you need to figure out how to make that happen. If you want to take care of your parents, that needs to be part of the plan.
My friend Terry wanted to retire at 60 but didn’t start seriously planning until he was 52. He’s 58 now and still working, not because he wants to, but because he has to. Don’t be like Terry.
How to get started:
- If you have kids, open a 529 college savings plan. Even small contributions can grow significantly over time, and it’s better than panicking when they’re seniors in high school.
- Get your legal stuff sorted out. I know, I know, it’s boring and morbid. But if you have assets or people who depend on you, you need a will, a healthcare directive, and a power of attorney.
- Think about what you actually want your life to look like in 10, 20, or 30 years. Then figure out what it’ll cost and work backward from there.
- Consider whether you’ll need to help aging parents. It’s not fun to think about, but it’s better to plan for it.
5. Know Where You Stand (Because You Can’t Fix What You Don’t Know)
By now, your financial life has probably gotten complicated.
Multiple bank accounts, investment accounts, maybe some stock options, real estate, various debts. It’s easy to lose track of the big picture when you’re juggling so many pieces.
But here’s the thing: you can’t manage what you don’t measure. I used to think I had a pretty good handle on my finances until I actually sat down and added everything up. Turns out, I was wrong about a lot of things.
How to get started:
- Use a tool like Empower or Tiller to track your net worth, or just make a simple spreadsheet. The point is to see everything in one place.
- Check in monthly or quarterly. You don’t need to obsess over every dollar, but you should know the general direction you’re heading.
- Calculate your net worth regularly. It’s basically your financial report card – assets minus debts.
- Adjust your plan based on what’s actually happening, not what you think is happening.
Knowing your number can be either the wake-up call you need or the confidence boost that keeps you going.
The Bottom Line
Look, I’m not going to lie to you and say this is easy.
Managing money in your 40s is complicated because life in your 40s is complicated. You’re:
- juggling more responsibilities
- dealing with more complexity
- facing more pressure than you probably ever have
But here’s what I’ve learned: you don’t have to be perfect. You don’t have to have everything figured out. You just have to start taking action on the things that matter most.
Focus on the five things we talked about:
- maxing out retirement
- killing debt
- protecting your income
- planning for big goals
- tracking your progress
These aren’t just nice-to-haves. They’re the foundation of financial security.
You don’t have to tackle everything at once. Pick one thing and start there. But do start. The decisions you make in your 40s will echo through the rest of your life, and future-you will either thank you for taking action or wish you had started sooner.
The good news? You’re here, reading this, thinking about these things. That’s already more than most people do (Sorry Terry.). Now let’s take the next step.
