You can be financially free in your 40s & 50s. Here’s how

Your 40s and 50s can be a busy time — you’re likely advancing in your career, watching your children grow up, and starting to think about retirement.

But if you don’t plan ahead, you could spend this time feeling tied down by your personal finances. Fortunately, making smart money moves now can help you set yourself up for financial freedom down the road.

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This will help ensure your finances stay top of mind and you remain focused on what you’re trying to accomplish.

Set long-term goals

To get started, collect information about all your monthly income and expenses, or everything coming in and everything going out.

Create a budget

There’s no set amount of money to save for an emergency fund, as it depends on your situation. But thinking about how much money you would need to replace lost income for three to six months isn’t a bad place to start.

Start your emergency fund

An emergency fund is typically for big financial emergencies, whereas a rainy day fund is for smaller unforeseen expenses.

Create a rainy day fund too

A debt-consolidation loan or one of the best balance transfer credit cards could help you gather all your debt in one place so it’s easier to manage.

Pay down or pay off high-interest debt

Budgeting and refinancing can make it seem like you have more money, which you technically do. But this is money that should be put toward your financial goals instead of unnecessary purchases.

Pay down or pay off student loan debt

If you want to build your credit, use different credit products on a regular basis. But make sure you use them responsibly.

Improve your credit score

Retirement may be years away, but it’s still recommended that you start saving for retirement when you’re young.

Increase your retirement contributions

It’s recommended to buy life insurance when you’re young and healthy because you’ll have a better chance at getting the most competitive rates.

Buy good life insurance

You could earn passive income from investing in real estate or start a side hustle as a dog walker. The opportunities are out there, so look for ones that make sense to you.

Start earning passive income from a side hustle