Age and Your Finances: Money Decisions to Make in Your 30s, 40s and 50s

Making Smart Financial Decisions at Every Stage of Life

As your life evolves, your financial needs change as well. It is crucial to make smart financial decisions and adjust your strategies to ensure peace of mind and financial stability in the long run. From buying a home to building an estate plan, here’s a guide to the key financial decisions you’ll have to make during three key decades of your adult life.

In Your 30s

Once you reach your 30s, you are likely becoming more established in your career. This decade is a great time to build a solid financial foundation. Here are some questions to guide your choices:

Yes or no on owning a home?
Homeownership is a classic part of the American dream, but it may not be a priority for everyone. Consider if you want to become a homeowner and weigh the responsibilities and benefits that come with it. The average price of a house is over $400,000 in 2025, so saving for a down payment and building good credit are essential.

Do you expect to have children?
Having children is a major financial decision, with estimates showing it costs upwards of $15,000 per year to raise a child. Planning and sacrifices may be necessary to make parenting work financially.

When do you want to retire?
Thinking about when you want to retire and what you want in your retirement years will help you enter that phase of life comfortably. Consider increasing retirement contributions, opening an IRA, or reducing spending to invest more in retirement.

Do you have life insurance?
Life insurance is crucial if you have dependents. Buying insurance early is cheaper and easier, as age and health issues can disqualify you from getting a policy later on.

In Your 40s

As you enter your 40s, the demands on your finances change. Here are some questions to consider:

Is your life insurance up to snuff?
Review your life insurance policy in your 40s and determine if you need additional or different coverage, especially if you have dependents.

Do you need to save for college?
Start saving for your children’s education in your 40s. Consider opening a 529 education savings plan for tax-advantaged savings.

Do you have an estate plan?
Estate planning is critical for everyone, regardless of income level. Create or update your will, choose a power of attorney, review investment account beneficiaries, and ensure your assets go to the right people.

In Your 50s

This is a pivotal decade where retirement is on the horizon. Ask yourself these questions:

Are your retirement savings on track?
Check your retirement account balance and allocations frequently in your 50s. Consider catch-up contributions to boost your savings.

Do you need additional life insurance?
If your term life insurance policy has expired, consider purchasing a new policy or opting for permanent life insurance to protect your family.

Do you need other forms of coverage?
Consider long-term care coverage or disability insurance in your 50s to protect yourself in your senior years.

Financial decisions evolve over time, and meeting with a financial planner can help you navigate these choices effectively. By using resources like Money’s product recommendations and having a solid plan in place, you can make informed decisions for your financial future.