Financial Goals

Work on These Financial Goals Before Turning 40

A wish list to fulfill financial goals, to achieve some targets is an important part of one’s life. Everyone dreams of achieving something in life. When you are in your 20s and 30s, things go a little differently. Generally, when we start earning, we tend to spend a large of our earnings on material things.

However, by the time you reach 40, you realize the importance of having adequate finances to enjoy life and look forward to the years when you are no longer working (retirement period).

There are a few common financial milestones, you should definitely consider. You can take steps towards it right now before it’s too late.

You must have understood that the last year (The pandemic year) has taught us to be prepared for every situation. Being ready for emergencies is crucial. Plan for the long-term, however, don’t underestimate the short-term financial goals and emergency situations. An emergency situation can be anything like job loss or health conditions, sudden losses, etc. Hence, it is usually a good idea to have at least 6 months of money as an emergency fund. Keep the same in liquid form.

Now, let’s see what financial goals you must consider before turning 40.

Have your own house:

Especially in today’s rising inflation, this is very relevant.

Every Indian has a dream to own a home. Indians feel secure when they have their own residence. Hence, there is a tendency to avail of a home loan during the working span and be debt-free as they approach retirement.

I agree this point is debatable. Some people prefer renting a house rather than buying it. However, the rent is increasing year on year basis due to inflation and the salaried class finds it difficult to keep up with the annual increases in rents. Hence, remember to have your own home. Investing in real estate is not a good idea, but for consumption purposes, it the necessary.

Also Read – Financial Stages of Life – Goal Planning Stage

Retirement Planning:

Most people ignore, ‘Retirement Planning’ as their financial goal. You will be dependent on your children in old age if don’t plan for your retirement. It is easy to meet financial needs when you are working and earning income. But, in the Retirement period, you won’t have an earning source. Now, you are in your 40s. You still have 15-20 years to plan for your retirement.

Make sure that you are investing at least 10% of your monthly income towards your retirement kitty. Creating a budget, maintaining a diary, and calculating your needs, are important in the journey of saving money for retirement.

If you are a risk-averse person, you can start with NPS, debt mutual funds, or at least increase contributions towards the Employee Provident Fund (in the case of salaried individuals). However, the best way to plan for retirement is to consult an expert.

Don’t be disheartened if you haven’t started already. After all, you still have two decades for your retirement.

Savings for Your Kids for their Higher Education:

The cost of Education is increasing tremendously. The amount of money your parents spent on your education will not be enough to fund your child’s education in the future. Nevertheless, parents need to consider the inflation factor and invest in their children’s future. Mutual fund SIPs are one of the best ways to invest in your children’s education.

Before turning 40, you must have an idea about your financial goals, risk profile, and investment capacity. Investing in a combination of equity and debt funds is a great way to earn above inflation and balance the risk factor. This planning would stop you from taking the wrong steps to fund your child’s education, such as withdrawing money from your PF account.

Health is wealth: Invest in your Health.

Financial goals are very important. However, there are goals that might not look financial but can impact your financial plan adversely if not taken care of. Looking after your health is very important to make the most of your retirement years. After all, whatever you have saved, you would want to enjoy that money in your retirement period. You have been taking care of your family and loved ones for the past 10-20 years. Now it’s time to gradually shift your focus on yourself and your health.

Apart from just taking care, you need to have adequate Health Insurance for yourself and your family because some things are beyond your control, and ignoring your health might be costlier than we think.

Scheduling a regular checkup, maintaining a healthy diet, and investing the money and time to improve your health, is key. And the good news is that living a healthy lifestyle is not as expensive as we think.

You will have a better chance of staying healthy for the rest of your life if you take health seriously in your 40s. It is a good financial decision as well because you will save a lot of money that would have otherwise been spent on hospitals.


We become wiser as we get older, and that is why, before turning 40, you should take a break to analyze and evaluate your financial situation.

No matter where you are today, these financial goals listed above, are simple to implement into your life but are inevitable.

These years before turning 40s are the backbones of your financial life and will be deciding factor for your retirement life.

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