Suddenly an empty nester? Transition into this new part of your life with financial success by adjusting your finances and planning for the future.
When your children move out and it’s just you and your spouse, a lot of things change. You have more free time, more space, and probably more spending money – but are you adjusting your finances and goals to match?
Learn how to revamp your budget accordingly once you’re on your own again.
Pay Down Debt
Use this as an opportunity to start paying down personal debt you may have. For example, one thing you want to avoid is going into retirement with a large mortgage, especially if you also have credit card and auto loan debt.
When revising your budget, think of the areas where you can easily cut back without doing too much work. Ideally, you can reduce grocery spending and utilities and put those savings into your debt payments.
Amplify Your Retirement Savings
Now’s the time to start saving even more for a better retirement. Take a look at bank statements and past budgets to see what you were spending on your kids while they were living at home. If you can make cuts in those areas, put that money in a 401(k) or IRA.
It’s also a good idea to decide on an amount that you can automate to savings so you never miss a month and make saving even more convenient.
Still Supporting the Kids?
Even though your kids have moved out, there will always be future expenses to plan for. If you’re giving them a monthly allowance while they get on their feet, add that to your budget after reviewing the costs that have gone down. Be sure to communicate with them how much you’re giving them and show them how to stay within a budget to avoid overspending.
If you’re paying for their college out of pocket or through loans, add that to the budget too. You can also plan ahead to help for graduation, traveling expenses, weddings, and grandchildren. Decide with your spouse in advance what you’ll be spending where so you both have a game plan.
This time should be exciting, bittersweet, and also a great opportunity to plan for your future. Prepare for retirement, pay down debt, and support your kids all while refreshing your finances.
Interested in learning more? Connect with our partner in financial education, BALANCE.