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The 3 biggest financial mistakes to avoid in your 40's

Blog Post
2 min read
Man and woman sitting on a park bench.

Some things get better with age - fine wine, classical music, and well-worn leather jackets. But financial mistakes? Not so much. If you’re in your 40s with high debt and little savings, money missteps can cost you more than just peace of mind. They can set you back years financially.

For example, lifestyle creep, where rising income leads to more spending on luxuries, can quietly erode savings or prevent you from setting money aside. At the same time, many in this age group face competing financial priorities, supporting both children and aging parents while trying to secure their own future.

But it’s not too late to course-correct. Here are three of the biggest financial mistakes people in this stage of life make and what can be done to get back on track.

1.    Ignoring High-Interest Debt

Closing your eyes to high-interest debt won’t make it go away. The interest compounds each month the debt is not paid in full.

The Fix

  • Choose a debt elimination method. The avalanche method targets high-interest debt first, while the snowball method focuses on paying off smaller balances for quick wins. Pick one and stick with it.
  • Balance transfers. If you qualify, move your high-interest credit card debt to a 0% APR balance transfer card so your entire payment goes toward the principal balance.
  • Cut costs & generate extra income. Trimming non-essentials or picking up a side hustle could help accelerate your debt payoff.

Eliminating debt can make room in your budget to save for emergencies and retirement.

2.    Underfunding Emergency Savings

Life happens. Cars break down, medical bills appear, and home repairs rarely wait for the perfect financial moment.

The Fix

  • Start small. Automate transfers of even $25–$50 per paycheck into a dedicated emergency savings account.
  • Use “found money” wisely. Tax refunds, workplace bonuses, or unexpected cash should go straight to savings instead of lifestyle upgrades.

Without an emergency fund, unbudgeted expenses might end up on credit cards, fueling a cycle of high-interest debt.

3.    Postponing Retirement Planning

Putting off saving until your 40s comes at a high cost. You’ll likely need to save significantly more to live your desired retirement lifestyle. However, you can get back on track if you have a plan.

The Fix

  • Run the numbers. Use free budgeting calculators to track your spending to discover where you might be able to redirect more money into a retirement account.
  • Max out free money. Contribute enough to get the full 401(k) match from your employer. Speak to your company’s human resources department for details.
  • Increase contributions. Bumping up your retirement savings by just 1% each quarter makes a big difference over time without feeling like a huge sacrifice.

Tackle debt, prioritize savings, and plan for the future to regain control of your finances and set yourself up for a comfortable retirement. Smart money moves never go out of style.