Retirement

If you haven't already started on saving for your retirement years, it is high time you do. Your EPF (Employees' Provident Fund) and pension from the employer may not be enough to maintain your lifestyle. You need to consider inflation as well in the long run.

While making a retirement corpus, one has to consider the increase in expenses towards health care and other emergencies as well.

You can voluntarily increase your share of the EPF contribution from your salary or opt for private pension plans but make sure these are not risky ones like equity.

Education for your kids

Invest in some instruments exclusively for your child's education. Be it mutual funds or Sukanya Samriddhi Scheme, the deposits made should not be a compromise on your retirement savings.

This is because there are plenty of options to fund your child's education like scholarships and low-interest education loans.

Based on your child's educational interest, invest in high yielding fund options to be able to set aside more funds in a shorter amount of time and with less regular contributions.

Debts

In your 40s, you need to give serious thought to clear all your debts. As it is a time to maximize your savings for later years, it is best to make some wise choices like getting rid of extra credit cards. Use these only for emergencies and start limiting your spendings.

Insurance

This is also a time when your family is the most dependent on your income. You could opt for a term life insurance policy as it comes with less investment and a large cover.

The large cover is necessary considering that your family will have to take care of the household expenses, mortgage and child's education in the unfortunate event of your death.

Apart from that, you will have to pick up suitable health insurance covers for yourself, spouse, children, and parents.

Emergency fund

There could be leakage in your house, a dent in your car, your child might need a new computer.... the list of emergencies is endless. This is why you need to be prepared for such a situation by being well-stocked so that you do have to take another debt to pay for the emergency and stress yourself further.

With every raise, increase your savings set for emergencies as well and keep this money in liquid form for easy access.