It’s a common experience: after sending the last of the kids to college, many empty nesters find themselves with more free time and disposable income than they’ve had in decades. With no more violin lessons to pay for or college funds to contribute to, empty nesters start planning vacations or take up hobbies that have been on the backburner. And while this should be a time of leisure after years of hard work, it can be easy for spending to get out of control. You may still be able to buy that RV or take up horseback riding, but following these tips when the nest is empty will help make sure you’re able to live comfortably within your means for years to come.
- Set a budget – It may sound obvious, but every financial planning tip that follows is built on this one. After the kids leave, it may feel like there’s more money to spend going out to high-end restaurants or buying a new car – and there may be. But to make sure your leisure activities are sustainable, consider sitting down with a financial planner and work out a budget. Keep track of expenses with a savings and checking account, and try your hand at online banking, even if you’re not particularly computer-savvy. Empty nesters who are or soon will be on a fixed retirement income should take into account potential living and medical costs as they age. Assisted living facilities and healthcare costs can add up, so plan ahead to avoid a surprise.
- Evaluate your hobbies – It may have always been your dream to own a horse ranch, but it’s important to be realistic about how you spend your savings in the years leading up to retirement. Perhaps buying one horse or making regular visits to a local corral would fit more comfortably into your budget. After the kids leave the house, empty nesters are left with a lot of free time on their hands, which can start to fill up with vacations, projects and purchases. When choosing how to spend your time and money, be mindful of your short- and long-term expenses, and make sure your current activities won’t harm your future budget.
- Determine a level of financial support for your children – When your kids finally move out, your budget should get a lot more flexible, right? Not always. Even if your children aren’t part of the “Boomerang Generation” and are able to find their own place to live, full-time jobs with benefits in their chosen field are still hard to come by for some recent graduates. It’s not unusual for parents to continue to support their kids after they leave home through health insurance, car payments or other financial assistance. To save money, consider establishing limits to the support you offer your kids once they do start working. They may have become used to the financial assistance, even if they no longer need it.
- Downsize your lifestyle – The big house was nice when you had the whole family under one roof, but now it might feel like too much space. Take an inventory of the major expenses and assets in your life, and decide whether or not they’re still essential. A smaller mortgage payment or car loan could mean extra money to spend on your next trip to the Caribbean. Reexamine smaller expenses too, like going out to eat or shopping during the weekend. Why not take a cooking course at a local community college and save money by making more meals at home? Or try making money on your hobbies by selling handmade gifts or vintage outfits online to boost your budget. These are just a couple hobbies that can save you money on everyday expenses.
Use online banking tools to keep track of your spending and saving
With a firm grasp on your finances, the help of a financial planner and tools like online and mobile banking to manage your savings or checking account, you’ll be well-situated to live your golden years to the fullest. Automatic bill pay, online account transfers and balance alerts make it simple to pay bills and build up savings. Plus, it’s easy to see where you’re spending and where you can cut back with online statements. You don’t have to stop having fun when the kids leave, but living within your means is the best way to take advantage of your new lifestyle.
Sponsored content was created and provided by RBS Citizens Financial Group.
photo: Daniel Oines
Our kids are little so we’re nowhere near worrying about our empty nest budget! However, I’m sure it will be here before you know it. We plan on retiring relatively early so we’ll need to watch our spending like a hawk!