Over the last couple of decades, you likely spent a lot of time learning, growing, and establishing yourself both in your career and finances. For many American adults, the decade of your 40s can be a time of peak earnings. The ways that you’re investing and saving now will have a strong impact on your future assets. Financial planning and building wealth is just as important now as it was 20 years ago, if not more so. Luckily, there are plenty of ways to take advantage of the knowledge and experience you’ve built over the years.

Financial Tips for Those in Their Forties

Take a look at your emergency savings 

This is one financial tip that applies at any age, but in your 40s, it may look a bit different than it did in your 20s, so it’s still worth checking in on. Health issues become more likely as we age, unexpected home repairs can be costly, and you probably have a few additional people relying on you now, too. Take advantage of these earning years to pad your emergency savings as much as you can. Aim for a minimum of three to six months of your household’s living expenses. If you can, having an emergency fund that covers you for a full year is ideal.

Reevaluate your retirement savings

When it comes to retirement savings, the sooner you get started, the better. But there also seems to be this common misconception that at a certain point you’re too late. There’s still time to catch up with your contributions if you’re starting at 40. Between the tax advantages and the power of compound interest, increasing your retirement savings now will help you become better prepared for later.

Experts recommend saving 15% of your income for retirement and having three times your salary saved by 40. If you’re not quite there yet, don’t panic. These numbers are general guidelines rather than rules. The amount you need for retirement and where you should be in your 40s all depends on your unique circumstances like your lifestyle choices, desired retirement age, travel plans, and more. You can use a handy (and free) retirement calculator to figure out how much you’ll need and whether or not you’re on the right track.

Find ways to cut unnecessary expenses

If you’re looking to ramp up your retirement savings but you have nothing left at the end of your paycheck to give, there may be other areas that you can pull from. Small expenses can add up to big ones over time if you’re not mindful of them. In the summer, focusing on simple changes through low-cost activities like grilling on a budget and driving down your bills by making your home more energy-efficient can make a huge difference.

Save on your kids' college expenses

Few life experiences are as costly as sending your child to college. Education is important and worth encouraging, especially if they’re eager to go to school, to begin with. But how do you combat the thousands and thousands of dollars that it may cost? One way is outfitting your college student’s dorm room on a budget. This task often comes with many unexpected expenses that add up quickly. 

Other ways to save may be to help them find scholarships, encourage them to rent textbooks instead of buying brand new ones, and teaching them the value of finding free entertainment options.

Work on your will

While this isn’t one of the most thrilling aspects of managing your finances, it’s one of the most important ones. Having a will written and an estate plan documented and on file with your loved ones will help you and your family understand your wishes, outline who will make decisions should you be incapacitated, who will handle your finances, and how your money or possessions will be distributed. 

If you have young children, you can also name your preferred guardian should anything happen to you. Dealing with debt after someone dies and handling their estate becomes much more complicated if there isn’t a clear plan in place. 

Check in with your insurance providers

While we’re on the topic of not-so-exciting personal finance tasks, it’s time to evaluate your insurance policies. You likely have homeowners, auto, and health insurance already, but there’s one more that many people forget about. Now is a great time to evaluate the policies currently in place and to add life insurance, as well. 

This provides benefits to your beneficiaries after you’re gone so that they’re not left taking over all of the household expenses, education costs, mortgages, and funeral expenses. Healthy financial choices now will set both you and your loved ones up for success later.