4 for 40: Simple strategies to fine-tune your finances at 40

Turning 40 is a milestone moment and a cause for celebrations – or commiserations, depending on your outlook!

Regardless of how you look at it, I realised recently there’s one thing turning 40 does mean (apart from a few more grey hairs!) – you’ve almost reached the halfway mark in your working life.

It’s almost scary how fast the first 20 years have passed.

And while you may want the next 20 or so to fly by just as quickly on your long countdown to retirement, you might want to slow things down for a moment and, as mundane as it sounds, take stock of your financial situation.

Is it where it needs to be so you can enjoy life once the working week is done forever?

Don’t despair if doing this makes you feel financially unprepared for the future – I’ve got four simple strategies to help you fine-tune your finances in your 40s!

Hatch a plan to pay off your mortgage

There’s nothing that will put a crack in your nest egg faster than the crushing weight of mortgage debt. Getting rid of your home loan before retirement should be a major priority. Aside from saving you tons of money in interest payments, paying off your mortgage will free up cash for other things, whether that’s extra savings, holidays or helping out the kids. Set a goal to pay off your mortgage by a certain date, adjust your payments to match, and go for it.

Crank up your retirement savings

It’s time to start thinking about your future. A little bit extra in savings now can have a massive impact later. Salary sacrificing to superannuation can be a tax effective way to save for your retirement. Have a chat with your financial adviser or super fund about the best way to increase your contributions.

Review your asset allocation

Most people’s superannuation account is the largest asset they’ll have outside the family home. If you’re in your 40s you won’t be able to access your super for another couple of decades (when you hit 60), so it’s still a long term investment. Check your super fund to make sure you have most of it invested in a “growth” option. This will allocate your hard earned funds to investments such as shares and property. When you’re in it for the long hall, this will give your fund the best chance to grow and outpace inflation.

Review your personal insurances

Getting sick or injured now could mean financial disaster for your family. Make sure you have appropriate coverage in place (life, disability, critical illness and income protection) to protect you from an unexpected health event. You’re not in your 20s any more – the cost of falling at this hurdle could be heavy. You can read more about income protection here.

A lot has changed in the past 20 years – you would have been getting this via Australia Post for starters – and there’s no telling what will happen in the next 20. Taking the time to fine tune your finances now will leave you feeling as ready as you can be for whatever the future brings.

Do you want to make the most of your money but aren't sure where to start?

Contact Leon to book your complimentary 15 minute phone or video chat.