The best budgeting tips for your 40s and 50s

You may feel like you graduated from college just yesterday, but by the time you reach your 40s, you’re officially middle aged. In fact, ages 40 to 59 are the only years when you’re not considered to be either a young adult or a senior adult—you're just an adult. And as such, this can be a pivotal (and exciting) time in your financial journey. Not only might you be earning more than you ever have, you’re also getting closer to retirement.

For most people, it’s also a wildly busy era where you’re trying to reach the peak of your career and raise kids, if you have them. These expert-driven budgeting tips may help guide your financial strategy.

Hopefully, you’ve been contributing to your 401(k) and/or an IRA since early in your career. If you have, review your contributions: Have you reached the 15% contribution rate (which includes the employer match)? If you have, there are other options to save even more.

“If you are comfortable with where your 401(k) is, then you can also consider putting some portion of your savings toward generating passive income for your future,” says Snigdha Kumar, a personal finance expert; a rental property is an example.

But it’s never too late to contribute to a 401(k) or IRA, Kumar notes, but try your best to put as much toward it as you can afford so you have a few years to allow compound interest to do its thing.

In your 40s, it’s critical to consider life insurance for the people in your life, says Monique White, a financial coach.

“Unfortunately, your financial decisions can affect your loved ones when you pass away. It’s important to allow your family and friends the luxury of coping with their loss without the financial stress,” she says. Life insurance may help pay for things like a funeral cost (currently estimated at nearly $8,000). And, “depending on your employment, you may be eligible for life insurance through your employer. If not, consider talking to a licensed life insurance agent about your options.”

If you are still chipping away at high-interest debt like student loans and credit cards, try to do all you can to get through it soon. “Reducing debt payments can increase your discretionary income,” White says. “An increase in discretionary income means contributing more toward retirement.”

There are different approaches, and a reputable financial professional can help you determine what makes the most sense with your current income, lifestyle, and debt picture. This could be the avalanche method, which means making the minimum monthly payment on your consumer debt and paying extra on the account with the highest interest rate. Or another option is finding a consolidation organization that will help you reduce your interest rates and monthly payments, White says.

“When economists think about happiness over your entire life, basically what causes you to be unhappy is if you lived a certain lifestyle and finding out that you can’t afford it anymore,” says Harris. Hedging your bets by putting aside money for your fixed expenses or working another year or two in order to secure that stable retirement lifestyle is, in his opinion, the way to go.

“There is a peace that comes with being debt free, or at least working toward it, that you deserve in your forties,” White says.

Likely, by the time you hit your 40s, you’ve become accustomed to budgeting your finances, and you know what is working and what is not, says Dr. Elizabeth Dunn, the chief science officer at Happy Money. “But you might also have fallen into some ‘spending ruts,’ continuing to buy things that no longer really give you joy.”

This might be something like a subscription that you don’t actually use. “Try taking a break from your spending ruts for a few weeks,” she says. “If you miss it by the end of this period, then permit yourself to start buying it again. The break you took should enable you to experience renewed pleasure from this purchase. And if you don’t miss it? Then this is a great way to cut back on spending.”

If you’re a parent, your kids likely take up most of your day, energy, and finances. During your 40s, it’s important to accelerate college savings because, like it or not, they’ll be packing up their room and heading out before you know it, says Kelley Holland, an author and financial coach for women.

“The sooner you put money in a 529 account, the more time it will have to grow,” she says. Monthly utomation of deposits can help, she says. If you have already been doing that, consider adding a bit more each month if you can afford it.

Retirement isn’t just a lofty dream for one day, it’s now just 15 to 20 years away. As you get closer, you’ll need to make your upcoming golden years your biggest financial priority. This means investing as much as you can.

As you get close to retirement, you should have a full financial plan up and running, says Kendall Clayborne, a certified financial planner. If you don’t, it’s time to get one that includes everything from mortgage payments to potential healthcare costs and beyond. “By having a full financial plan run, you have the opportunity to see if you are on track and if you need to make any or if changes before taking any irreversible steps such as leaving the workforce permanently,” she says. “It can also help you make informed decisions about other elements of retirement, like when to start taking Social Security.”

Spending habits change over the years and they are easy to lose control of. And especially when retirement is in sight. White says it’s time to get to know your budget more closely by tracking your essential expenses and discretionary spending. “Ask yourself what your wants versus needs are,” she continues. “Use a retirement calculator to estimate how much you will receive each month, then figure out how much you will need each month to maintain your lifestyle.”

Whether you’re on track or trying to catch up, knowing how much you can contribute into your retirement accounts is crucial for arranging your departure from the workforce. In other words, keep maxing out your retirement contributions.

Also, try to take advantage of new opportunities: The IRS typically increases catch-up contributions each year.

In addition to saving, your fifties can be a good time to reassess your living expenses and living arrangements, Holland says. Maybe your kids left for college or will in the next few years. Do you still need your large home? Or could you sell, turn a profit, and buy something smaller and less expensive? The more you can save, the more you can put toward retirement or even travel in your golden years. “You may also find that downsizing helps you reduce the amount of time you spend on household chores,” Holland adds.

While no one wants to think about potential illness, aging is a reality. And since people live longer than before, it’s vital to prepare for your lifespan and healthcare costs. Pham says another major consideration is that you may also be a part of the sandwich generation, which refers to adults caring for elderly parents and their own children. “Consult with your aging loved ones and your advisors to discuss the best way to plan,” she adds.

A version of this article originally appeared on HerMoney.