There are few things as important to your retirement plan as your adult children making their way out into the world on their own.
While the emotions of separating from your children can be difficult, it is also important to look at some of the decisions you are now able to make, given that you are now at a critical point for starting the path to your retirement journey.
The income that can be freed up with children out of the house can present many opportunities, but it is important not to squander them.
Here’s our guide for some of the things you will need to consider.
Read: Seven tips for living well on the Age Pension
Adjust your budget
One of the first things you will need to do is figure out how much extra money you will have at your disposal each week.
You will need to add up your weekly expenses and look at the differences so that you know how much extra money you will be able to direct into your savings accounts or investments.
Find out how much additional money you are now saving on groceries and water bills each month.
Arrange for this money to be redirected into a savings account at monthly intervals. You may be surprised by how quickly it slips through the cracks of daily spending otherwise.
Read: Retiree costs rising at a blinding pace
Downsizing
Many people wait quite a while after becoming empty nesters before they consider downsizing, but the benefits can be enormous if you do it earlier.
If you choose to downsize to free up the capital in your family home, you can be left with a sizeable chunk of money to invest.
There are, of course, other reasons to consider downsizing other than finances, for example, you could sell a larger home in the suburbs and look at moving closer to the city if it suits your work and lifestyle.
Moving closer to work with less time to commute could give you a much better quality of life for a longer period, and is definitely something to consider, now you don’t need quite as much space.
Read: Are you retiring with more than you need?
Sell a car
Selling a family car may be one of the best ways to generate income and reduce ongoing costs.
Even if you still want to have two cars, you may want to downsize your cars now that you no longer have to ferry the kids everywhere or pick them up after a big night out.
See how often you are using your second car, though, and make sure that it justifies the amount of money you are spending on maintenance, insurance and registration.
The second-hand car market is still booming in the wake of the pandemic and you could cash in at the perfect time.
Remove children from your insurance
If you have been paying to have your kids covered on your car or health insurance, it may be the right time to consider taking them off. It may also be the right time to consider stopping paying for life insurance.
However, this can be a complicated process with many considerations. For free advice on life insurance and your health insurance policy, consult the experts at Compare Club.
Are you an empty nester? Have you found that your monthly expenses changed dramatically after your adult children left home? What advice would you give to any newly empty nesters? Why not share your thoughts in the comments section below?
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