7 Financial Decisions You Must Make by 40

Financial Decisions

If you’re approaching 40, you may or may not be content with your financial decisions thus far. If you’re not happy, you may wish you had more money saved or had a house by now. But the problem is you don’t.

Even if you’re discouraged, that doesn’t mean you can’t accomplish your goals! It may take some hard work, but you can make positive financial decisions moving forward.

Whether you’re trying to get out of debt or save for a house, having the right mindset can help you stay on track. Here are seven financial decisions to make by the time you reach 40.

1. Have a Plan on How to Eliminate Debt

By 40, you’ll have some debt, such as owing money on a home, car, or school.

Having a debt-free plan is vital if you want to be able to save more money moving forward. To get on the right path, you should first pay off all high-interest debt. This type of debt usually comes from credit cards. After paying them off, focus on paying off the rest of your debt.

Not everything will get paid off by the time you reach 40. But at least you’ll have a plan on how to get out of debt and save.

2. Pay Off Credit Cards on Time

Speaking of paying off high-interest credit cards, make it your priority to pay them on time.

If you pay your credit card late one time, it likely won’t affect your credit. But if you make a habit of it, it will have lasting effects.

Get into the habit of paying off your credit card on time each month. And, if possible, pay it off in full before putting more on there the following month.

3. Improve Your Skill Set

If you have a robust skill set and it has helped you in your career, that’s fantastic. But don’t stop there when you can learn more skills that’ll help you improve yourself.

Learning a new skill, such as essential business tactics, can go the distance. Say you already have a marketing degree. Then adding business knowledge can vastly improve your career!

The more skills you have, the more likely you’ll get a promotion, and that means getting paid more!

4. Don’t Let Costs Overcome You

Throughout your life, you’re going to be tempted to spend beyond what you’re making. Don’t overspend because it can result in wracking up a lot of debt.

Even if you get a raise or inherit some money, don’t change your lifestyle.

It’s okay to reward yourself once in a while with a family vacation or buying a car.

But for the most part, stick to the healthy financial plan you’ve made for yourself. That way, you can make sure there’s plenty of money in the bank for any potential hardships.

5. Have an Emergency Fund

Do you have an emergency fund set up? If you don’t yet, get on it! By the time you reach your 40s, you should have socked away at least enough money to help you weather a storm.

If you were to lose your job, you should have enough money to get you through three or more months of unemployment.

Work hard now to set aside money for a rainy day, and that way, you won’t have to worry if a time like that arrives.

6. Adjust Your Retirement Contributions

If you’re in a position to contribute more to your retirement, do so! Instead of buying yet another car, you could put aside money for your future.

Add more to your 401k or open up a Roth IRA. Both are a smart way to save for your retirement!

Another thing to consider is to invest your money. If you’re not sure where to start, you can elicit the help of a financial advisor. They’ll have suggestions on what to invest in, such as real estate investments. Another option is to ask a friend who has been investing for a while where to start.

7. Improve the Value of Your Home

If you’re thinking about selling your home soon, it’s wise to think of ways to increase its value. Even if you don’t plan on selling it for a while, there are still steps you can take to make it more valuable.

Build an extra bedroom or improve the deck. Of course, these home improvements cost money.

But if you enhance your home’s value now, you’ll get a greater return on your investment when you sell it one day!


Approaching your 40s shouldn’t be something you dread. That just means you’re getting older and wiser! Since you’re working hard to make smart decisions, make sure you’re focusing on your finances.

Save your money, pay off debt, and contribute to your 401k. These are just a few ways to start your 40s off strong with the right financial mindset.

Keep these habits up past your 40s, and you’ll no doubt set yourself up for success.