1. Get rid of consumer debt
Financial planner Ryan Inman suggests creating a plan to deal with any consumer debt before turning 40, including high interest credit card debt. There are several approaches to tackling debt, including paying as much as possible each month, the debt snowball or debt avalanche methods, or applying for a balance transfer credit card with a 0% APR.
2. Max out retirement savings
Financial planner Benjamin Brandt advises people approaching 40 to max out their retirement savings. Increasing retirement contributions can also reduce taxable income and lead to a smaller income tax bill.
3. Make sure to get the full employer match on your retirement plan
Financial planner Brandon Renfro recommends ensuring you’re getting the full employer match on your retirement plan, as this is free money for your savings.
4. Automate your investments
CPA Riley Adams suggests automating investments to prevent unnecessary spending or inflating your lifestyle as your income grows.
5. Address insurance needs
Financial planner Brenton Harrison advises evaluating insurance needs based on your projected financial situation in 10 years and purchasing insurance accordingly.
6. Build an emergency fund
Ensure you have an emergency fund with three to six months of expenses saved up to protect yourself from unforeseen financial setbacks.