When the nest is empty and the kids no longer need financial support, many men and women find themselves with some extra money in their budget. Fewer mouths to feed and no more college tuition bills can give parents a sense of financial freedom they may not have had since before starting their family. That freedom can also lead to overspending, something that can put retirement in jeopardy if you’re are not careful.
Though it’s understandable to splurge on a well-deserved getaway once the kids have finally left the house, it’s important for adults to ensure that such splurging does not become routine. The following are a few ways you can avoid overspending as you get closer to retirement.
• Pay with cash whenever possible. Swiping a debit card or credit card is certainly a convenient way to shop, but it can also be dangerous. Using cash to make purchases reduces the likelihood of overspending. This can help you get a better idea of how much money you’re spending and if there are any steps you can take to curtail that spending.
Withdraw money from the bank once per week and use that as your weekly supply of money. If you find yourself frequently running out of money each week, then you’re likely spending more than you should.
• Keep a financial journal. When you have logged several months’ activity, examine your journal to see if there are any expenses that can be trimmed to save money.
• Don’t go overboard rewarding yourself. Avoid overdoing it so your finances aren’t stretched too thinly. A vacation with your spouse is reasonable, but buying a villa overseas might be a little over the top. Your monthly expenses once the kids have moved out should be lower, so if you find your cost of living has increased, you might be forced to determine which of your expenses are luxuries and which are necessities.
• Take advantage of your “experience.” Though accepting a “senior” discount might be a blow to your pride, it also can be a boon to your bottom line. Many establishments offer discounts to men and women age 55 and older. This can help you save a substantial amount of money, and no one has to know you’ve started cashing in on your experience.