You work hard for your money, and you worked hard as a parent raising kids. As the time has come for them to leave for college, adulthood, and their own lives, you find yourself in your own new stage of life. You’re now an empty-nester.
Whether you are eager for the freedom it entails or fear the emptiness that might linger, or even both, you still need to be as careful with your finances as you ever were. That means avoiding three money mistakes made by empty-nesters quite frequently.
Procrastinating About Selling Your Home
It’s understandable if you want to avoid downsizing or relocating until after the last kid is gone. Why make them move during the end of their childhood?
Then again, not even starting the process of home-selling until they’re all gone means running risks. Just getting your home ready and then listed takes time, and actual selling can take months or even a few years in some markets. That’s just more time you have to handle the mortgage, utilities, and upkeep of a space that’s suddenly much bigger than you need.
Spending More Than You Should
When kids all leave, you’re probably not spending lots of money on feeding and clothing them. You might even save a ton on gas since you’re not ferrying them everywhere anymore. Insurance and health care savings alone can be quite a bit.
You might feel tempted to start splurging on all kinds of new things with that newfound discretionary spending capacity, but you need avoid that. You’re probably closing in on your retirement, and you need to make sure you’re being as smart about your money as ever.
Failing to Budget
Your expenses might not go down as much as you think. After all, part of empty-nesting might be putting one or more kids through college at the same time you’re looking for a new home. You might also want to start tightening up your budget in preparation for living on a fixed income during retirement. Focus on the quality of your years while keeping enough for a high quantity of years.
Empty-nesting is a huge life change, and no matter how much life experience you have, there are new financial wrinkles to it you’ve never faced before.