Now that your kids have left home and you don’t have the same parental responsibilities, it’s time to take a look at your finances, evaluate your goals and bolster your savings so you’re on the right path toward a financially sound retirement. Here are 7 money-smart moves to consider.
Re-evaluate Your Budget
With the kids gone, you should have fewer monthly expenses. Having an empty nest will likely affect your budget. Assess how much you were spending and where you can cut back now. An app like Mint or PocketGuard can help you organize your new budget and put together a financial plan.
Assess Your Retirement Savings
Most Americans aren’t saving enough money and don’t know how to plan for retirement. Now that your kids are off on their adventures, you should think about how much you need to save for retirement each year so you can live out your golden years in comfort. With less financial responsibilities, you have more flexibility to contribute funds to your savings without drastically changing your lifestyle. It’s also a good idea to talk with a financial adviser who can review your finances, give you advice on how to achieve your goals, and work with you to develop a good plan.
Reassess Your Insurance Needs
Becoming an empty nester means it’s time to reconsider scaling back your life insurance, which is designed to help your dependents maintain their standard of living in the event of your death. If you’re still relatively young and you have fewer people depending on your income, you may not need to put as much into a policy. If you’re older, life insurance may be more of a necessity to help your family pay for final expenses, such as your funeral costs or debt. Talk to your insurance agent about the types of life insurance policies that might be right for you.
Consider Long-Term Healthcare Options
You should also start thinking about your long-term health care needs. Medicare does not cover long-term care, so investigate other types of healthcare insurance and the costs, such as long-term care insurance, which is a policy that covers basic daily needs over an extended time such as the cost of chronic illnesses or disabilities.
Create an Estate Plan
Even if you are only in your 40s or 50s when your kids leave the nest, you aren’t too young to consider what you’d like to leave behind for your children and grandchildren, and who will manage your estate. Contact an estate lawyer to figure out a plan of action.
Move to a Smaller Home
With the kids gone, you probably don’t need to stay in a large house. Downsize to a smaller home that fits your new lifestyle. You’ll save money on utilities and home maintenance costs, which can free up money to build up your savings or pay off any debt you have.
Cut the Financial Cord
It isn’t easy to cut your kids off financially, but now that they’ve left it’s time for them to learn to survive on their own. Cutting the cord doesn’t mean you won’t still worry about their well-being, but you need to spend your time and money taking care of yourself. You’ve earned it! Start by removing your kids from your car insurance and health care insurance, then start trimming back on financial support, whether that’s in the form of checks, cash, or simply paying for items they want. Not only will cutting back save you money, but it will also better prepare your adult kids for their future.