Build up your cash reserves.
Establishing an emergency fund is the very first step in any financial planning. There is no right or wrong answer about how much cash to have, but having from three to six months of your normal income in a liquid and safe account is recommended.
Reduce your debt.
Reducing and eventually eliminating your credit card debt, student loan or medical bills should be your next priority. By doing so, your income can be channeled to investing for your future.
Max out your employee benefits.
Once in your 40s, you should be saving as much in your 401(k) as your employer matches. Your money doubles just because of this employer match, even if you do not make any profit on that investment! Consult your tax advisor.
Make your own retirement plan.
In your 40s, retirement is not that far away. In addition to your savings for retirement at work, making contributions to a Roth IRA or a traditional retirement account is important. Consult your tax advisor.
Save for college tuition.
It is not a surprise that college is not cheap. If you are in your 40s and have kids, you should start saving for their college education. Once your kids are born, financial advisers suggest that the earlier you start saving, the better.
Insure your family.
Having a disaster and not being appropriately covered with insurance policies is not the best way to find out you should do an insurance-needs analysis. Checking your health, home, auto and life insurance policies is crucial to make sure you and your loved-ones have the right coverage before an emergency occurs.