3 Essential Finance Moves to Make Before You Turn 40

Some people dread turning 40. Others can't wait and see getting older as a positive thing. But no matter which camp you fall into, by the time you reach the age of 40, there are certain financial moves you'll want to have tackled. Here are three to aim for before your 40th birthday.

1. Shed your high-interest debt

It's not unusual to carry credit card debt in your 30s. But you should also know that every dollar you're paying your credit card company in interest is a dollar you can't save or invest for another goal. As such, it's a really good thing to try to be debt-free by 40.

To do that, you may have to get strategic about repaying your debt, whether by doing a balance transfer or consolidating it into a personal loan. You may also have to consider a side hustle if your debt load is pretty hefty. But not carrying costly debt into your 40s could make that decade of life a lot less financially stressful.

2. Boost your retirement plan contributions

Maybe you've been modestly funding an individual retirement account (IRA) or 401(k) when you can. You should know that any contribution you make to a retirement plan could come in handy later in life. But by the time you reach age 40, you may want to have three times your salary socked away, according to Fidelity.

If you're not there yet, think about your current expenses and whether some can be shed. Or, once again, consider a side hustle to make it easier to find the funds for a retirement plan. Having a solid nest egg by age 40 will allow you to build on that sum in your 50s and beyond.

You should also know that over the past 50 years, the stock market has averaged a 10% annual return. So let's say you earn $75,000 a year and manage to save up $225,000 by age 40. Even if you don't contribute another dollar to your retirement account, if your money grows at a yearly 10% return, by age 65, you'll end up with a nest egg worth over $2.4 million. Really.

3. Figure out if homeownership is right for you

Due to the tough housing market, some people aren't able to become homeowners until their 40s. And maybe that's a goal you've been desperate to save for.

But before you get your mind set on buying a home by age 40, or in your 40s, think about whether owning a place of your own is really what's best for you. Remember, there are costs involved in owning a home that renters don't have to deal with, like property taxes, maintenance, and repairs. Owning a home is also a lot more work, because every single thing that goes wrong is a thing you have to deal with, not a landlord.

So if you've been fixated on saving for a home, ask yourself why. Why is it that you want to own a home? Is it for stability? Or is it because that's what you've been told is the "best" thing to do?

The moves you make in your 30s could set you up for a world of success later on. Aim to shed your high-interest debt, save nicely in a retirement plan, and make a decision on homeownership one way or another before you turn 40.