As liberating as that feeling may be when the last child leaves the nest and becomes financially independent, it can also be daunting. For so long, your children have played a huge role when it comes to your finances and budgeting and now it’s time to shift your focus. Here are some financial tips for empty nesters:
STAY ON BUDGET
Once your kids are out of the house, you may have some cash that’s been freed up in your budget. It can be tempting to take this money and splurge on items such as vacations or home improvements but before doing anything, sit down with your budget and re-work it to fit your new lifestyle. While it’s important to focus on your goals, such as paying down debt and saving, make sure you do include some fun in your budget to maintain that balance.
PLAN FOR RETIREMENT
If you haven’t already, now is the time to start setting up some concrete plans once you hit retirement. Make sure that your savings are on target and you’re maximizing your annual contributions. If you’re married, you should sit down with your spouse and ensure that you’re both on the same page when it comes to retirement.
TIME TO DOWNSIZE?
One thing that may help combat the feelings of a ‘big, empty house’ is moving into a smaller one. While you probably want room for kids and grandkids to come visit, a smaller home may work better with your budget as well as your health. The older you get, the more difficult it can be to take care of a large home.
According to MarketWatch, 80% of parents said that they have provided some form of financial support for their children over the age of 18. Many do so at the expense of their own future by prioritizing this over saving for retirement or eliminating debt. Once your kids have moved out, make it clear what they can expect from you in terms of financial support, if any. Most importantly, stick to it. If you bend the rules for one child, you’ll be setting a precedent for the others.