moneyMany parents dread the day their children move away, and they become empty nesters. But as business development professional Fahim Imam-Sadeque explains, some freedom comes through this experience as well.
Parents spend much of their lives saving for their children’s milestones. Once they become empty nesters, it’s time to make important financial decisions.
Here are some smart financial moves you can make once your children move away.
Re-Assess Your Budget
The first step every parent should take when they become empty nesters is to re-assess their budget. Children are frankly expensive, and when they move out of the house, you could see a windfall of extra cash added to your bottom line. If you don’t have a solid plan for using this money, you could easily find yourself making not-so-smart decisions.
Take some time to sit down and look at your new financial situation now that your children have left the house. Then, make a plan to re-allocate these funds. There are many options for where this money can go, and creating a solid plan is a great decision.
Focus on Retirement Savings
Many parents have to cut back on their retirement savings when their children are still financially dependent on them. Once they move out of the house, the extra money you’ll have can be put toward your retirement savings. Even if you were already contributing to a retirement plan, it’s a good idea to increase those contributions so you can accelerate your retirement.
Improve Your Home
Always wanted a new kitchen but didn’t have the funds for it? Want to spruce up your garden to make your home more inviting?
Many home improvements are smart investments that will pay off when you sell your home. And the great part about these investments is that you get to enjoy them while you’re still living in the house.
Pay Off Your Debt
A great way to use the extra funds you’ll have as empty nesters is to pay off your debt as quickly as possible. This could include paying down credit cards, cars, other loans and even your mortgage.
When you put extra money toward your debt, you could be saving yourself a considerable amount of money in interest over the life of these loans. While paying off debt may not be as exciting as taking a lavish holiday, it’ll allow you to live a more stress-free life.
Your goals before this time are likely much different than they will be from this point forward. These goals could include moving to a new location, downsizing, taking a holiday or crafting a solid retirement plan.
When you set financial goals, you’re more likely to achieve them than if you don’t set goals. So, take a look at your situation now, and create a plan for how you will reach whatever goals you want to achieve.