With September comes back-to-school season, leaving many parents with empty nests as children explore their post secondary options outside the family home. If you are one of these newfound empty nesters, this is a great time to take the opportunity to give yourself a fresh start when it comes to your finances.
Reset Your Financial Resolutions
With education costs accounted for and household costs going down as children leave the nest, financial priorities and resolutions change. Now is the time to make sure that you are on the right path to your other financial goals like retirement or that bucket list trip!
Typically, empty nesters fall into the 45- to 65-year-old age bracket. With a decade or two left in your working life, there is still time to accumulate as much as possible for your financial future! Envision your future goals, including you and your partner’s retirement. Try to anticipate how you will spend your time and money, and make the plans necessary to sustain that lifestyle. You can read more about financial tips for retirement planning here.
With more than 50% of empty nesters owning their house outright and a healthy amount of discretionary income available, many have extra room in the budget to add more to their savings. Take advantage of these savings opportunities to build up a generous nest egg for your future financial goals. If you don’t own your home already, consider making paying off your mortgage a key goal of your financial resolutions.
Care planning is also an important item to consider. You may no longer be funding your child’s extracurriculars or saving for their education, but other financial responsibilities can crop up. Is there an ageing parent who may need assistance? An adult child who has come upon tough times? Consider the possibility that you may be caring for others as well as yourself, and make this a part of your financial plan to accommodate this if necessary.
Tidy Up Your Finances
As you reset your financial resolutions in this stage of life, consider tidying up your finances as well. Be certain that you know how much money you have, where that money is, and what it is doing there. Consolidate any accounts or credit cards if it makes sense for you to do so.
After you take stock of your portfolio, think about reviewing your strategy too. Ensure that your current investment plan still makes sense for your lifestyle and goals. Most Canadians in the 45 to 65 age range describe themselves as conservative investors. This a logical choice considering many want to protect the wealth they have likely amassed at this point in their lives. Speak with your financial advisor to discuss your investment plan to make sure it fits your needs.
Tracking your spending is another way to tidy up your finances, albeit on a smaller scale. Documenting your daily purchases may yield surprising results in regards to what you spend on clothing, coffee, eating out and other items. Get a handle on your budget in order to confirm that you are maximizing your financial potential and putting your money to the best use possible.
Tackling Your Debt Before The Holiday Season Begins
Debt can stand in the way of reaching financial freedom. Getting ahead of debt now and starting with a clean slate can help you make the most out of your empty nest. Paying off any remaining debts also means that you have more money to put toward other financial goals — including retirement — later on.
Consolidate any debt you may have and make a plan to pay off this debt as efficiently as possible. It may seem overwhelming to see the total of what you owe, however, getting a good grasp on this amount is the best way to make an effective plan to pay it off.
Resetting your financial resolutions and tidying up your finances can seem daunting. However, ensuring that you are on the right financial track is crucial to a happy and successful future as you enter a new chapter in your life.