Your 40s can be a challenging financial time. However, you can take steps to avoid the common money mistakes that create challenges with your personal finances.   

Follow these strategies:

1. Plan with liquidity in mind. How much of your portfolio is accessible in liquid assets? Liquid assets refer to cash or investments that can be easily turned into cash.

* During an emergency, you may need fast access to cash. In your 40s, emergencies can include a family member’s unexpected trip to a doctor that isn’t covered by insurance. They can also include an unexpected breakdown at home or at work. How will you pay for these items?

* You want to avoid being in a financial situation that forces you to sell your belongings or get loans because you need cash. Evaluate your portfolio and ensure you have enough cash to handle a variety of emergencies.

2. Balance your payments. It’s important to have a balance of payments, so you’re not spending too much in one area. Trying to pay off the entire mortgage too soon is a common money mistake. It’s tempting to put extra payments toward the house, but other areas may need to be examined.

* Are you trying to pay off your mortgage while a pile of credit card bills sits on your desk? Although it’s a good feeling to own your home, paying off the mortgage shouldn’t be the only goal.

* Extra mortgage payments can wait in many instances, so you can focus on higher interest debt such as credit cards, student loans, and other types of loans. In addition, it’s important to be contributing toward your retirement during your 40s so you give your money time to grow. Also, consider your children’s college savings funds.

3. Focus on retirement. In your 40s, it’s easy to expect that you can continue to work for several more decades before retirement. However, your retirement savings need to be a priority.

* Retirement savings work best as a long-term goal. Your 40s are an ideal time to build your investments.

* You may want to avoid the common money mistake of taking out cash from your retirement savings. In addition to penalties and fees, you’re reducing the portfolio’s ability to grow.

* If you take money out of your retirement funds, you may also face large penalties from both the federal and state government during tax time.

4. Consider your job security. During your 40s, it’s easy to become complacent about your job.

* It’s important to pay attention to your company’s culture and consider job security. Are you watching older workers being pushed out for the younger generation? Are older workers in the same field struggling to find replacement jobs?

* Job security can affect every aspect of your financial life. It’s also important to consider your income. Do you expect it to rise, or is it at a stable level? In your 40s, you may expect income to continue to rise, but experts share that this may not always be the case. It’s wiser to avoid the money mistake of spending too much because of hopes for a raise.

If you’re in your 40s, be aware of these common money mistakes and protect your financial future. This is a perfect time to strengthen your financial foundation at home and at work.