Financial circumstances change when you become an empty nester. With your children out of the house and presumably out of your pocketbook, money matters change drastically, so streamlining your finances will make the most of your money. Dreams of lavish vacations, buying a vacation home or purchasing a boat, motorcycle or sports car could be within your reach if you learn how to save money as an empty nester. Read below on how to do so.
Redesign Your Budget
Since your finances will change due to fewer child-rearing expenses and more disposable income, you need to redesign your budget. If you never created a budget, devise one now, so that you can start saving for big ticket items like a new car or padding your nest egg. Make sure you factor in future health care costs and funds for unseen catastrophes like debilitating illnesses and job loss.
Make Kids Pay
Are your kids still tugging on your purse strings, hoping for a handout? Maybe it’s time to ask them to contribute to household expenses or pay monthly rent. If they make a good salary but don’t want to move out to their own place yet, it’s only fair for them to help out and stop expecting their bills paid by you.
Stave Off Spending
With newfound money you’re seeing in your paycheck, you may be tempted to blow it on vacations and extravagant hobbies. Now that the kids are away, it’s time to play, but if you play too hard, you’ll be out of money before you know it and working instead of retiring. Little things like daily cups of expensive coffee, says US News, add up, so does eating and entertaining outside the home. Adjust your spending so you’re saving while enjoying yourself.
By handling repairs yourself, you can save money but only if you know what you’re doing and can afford the materials used. Although you may think it’s time to renovate as many rooms as possible, Expert Beacon advises that you shouldn’t spend too much on unnecessary home renovations unless you know that it will pay off when you sell the house.
Donate or Sell Your Stuff
What’s the likelihood you need every piece of clothing or household item you own? You probably don’t even know what you have in your attic or basement after years of residing in your house. Start decluttering and sell unwanted items online or host a yard sale; or donate items to charitable organizations for tax deductions.
Downsize Your Living Space
Maybe it’s time you downsized your living space and invested in a smaller home. Before you move out, however, calculate if moving from your current home to a smaller one will actually reduce your expenses.
Financial Goals and Investment Adjustments
How is your investment portfolio working for you or do you even have one? Find a financial advisor who can help adjust your investments to allow you to earn more money and discover tax credits and deductions to assist you in retaining more money to be directed to retirement savings. Although you can spend money on necessary repairs, the excess should go to your savings to pad your nest egg. Paying down debts should also be a priority.
Revisit Health Care Options
Are your health care benefits really benefitting you? Start investigating more economical options that offer a wider variety of care and savings plan alternatives. Evaluate your plans for long-term care because Medicare will not cover everything, says Expert Beacon.