Financial Tips and advice.
BUDGETING
Being an Empty Nester should be a joyous event, and provide extra time to focus on yourself and your partner (if applicable). You should try in to invest in relationships, exercise, education but also delve into your financial status.
The financial aspects of becoming an Empty Nester are extremely important, and a lot of people ignore this facet and start to plan too late. If you start planning for your eventual retirement early, you should have enough money, time and income to lead a pleasant retirement without too much pressure. Below are some ideas to get you started, but they are only tips and suggestions, and you should seek financial guidance from an accredited source before making any life changes in your finances.
One of your first financial decisions is to reassess your budget. Or more importantly, write a budget if you do not already have one.
It doesn’t have to be complicated.
Income coming in, verses all expenses going out. What is left over is then your excess cash flow. When you have children at home, I’m sure that this excess cash is minimal.
So the next thing to do, is draft up a budget, without the children at home. Your expenses should change; such as money spent on groceries, Tv subscriptions, gas, water and electricity are things that should drop in cost.
Try to think of everything you currently pay for with the kids at home, and delete them from your budget, or decrease the amount paid out. You may not think $20 a month on Netflix will matter, but it all adds up in the end.
Excess cash flow should be higher now, and what you decide to do with that excess cash will help towards your Retirement Plan.
SPENDING
Once the children leave home, a lot of parents find that their excess income has increased because of their expenses decreasing. This is true, but also, most beginning Empty Nesters make a mistake buy spending that excess income on frivolous things when it could be used to increase the retirement “booty”.
Advise would suggest to be careful with the excess cash flow. Yes, it is great to concentrate on spending some money on yourselves, but it is always wise to balance this up with a good savings/retirement plan.
Ideally, you will want to spend money only on the things that make your life easier and more enjoyable. So, does that lounge room really need a full blown renovation? Does the kitchen really need an uplift, or does that $5,000 couch really need to be bought. It is essential that you balance your spending so as to not “Over-Indulge” on non essentials, but bearing that in mind, spending on yourselves is still a good thing. Just, align it well with your savings plan.
Here is where couples or single Empty Nesters should set up a budget that includes extra spending, but still saving for the future. An extra account for travel, or car expenses is a great idea so you are never caught out not having the money and having to draw on your savings. Grandkids can also be an expensive cost if you travel to see them, presents, and of course if you look after them on holidays. Plan for this, make a special account just for the little ones, because who doesn’t want to spend money on the grandchildren.
It is essential you start to enjoy your new found freedom and extra cash flow; start a new hobby, have dinners out, travel, or see movies and or museums and cultural experiences. It is a balancing act, but enjoy yourself, but plan carefully.
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INVESTING
Investing for your future is just an important as enjoying your new found freedom. There are several companies and professionals that can help with this.
To start, it’s best to have a look at your current financial portfolio. This is just a snap shot of what you have in cash assets, and also what long term assets that you have that will earn you money, against what debts you owe.
* Houses and Property
* Rental Properties
* Term deposits
* Super accounts
* Shares and bonds and other EFT’s
* What debts you have (credit cards, mortgages, loans, store cards)
See how much you are worth, and what monies you might obtain from these investments.
From here you can decide whether to invest more into certain areas, or change some of your investments into more high yielding options.
A professional Financial advisor will be able to help you plan and make the most of the money you currently have, and give you advise on how to make your finances grow for your retirement.
It is always best to look into these areas now, so you can adjust, or get into investing to ensure you can still live a wonderful, happy and stress free life as an Empty Nester.
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SUPERANNUATION
Although it may seem too early to be thinking of your retirement as you still might have 15 - 20 years of work ahead of you, but it is essential to delve into your super fund to see if it will be enough for you to live a comfortable retirement life.
Things to consider will be
* If you are single or a couple
* Have many super accounts do you have
* Combining your own personal super accounts into one to avoid excess fees
* What sort of retirement do you wish to have and will there be enough money in your super to do this
* Do you need to add extra super contributions to your account, which are also Tax Deductible
* Do you have any Lost super that you can claim
* Does your Super Fund allow you to chose where your money is invested; can you change those investments
So firstly, decide on the type of lifestyle you would like to have when you do retire. Will it be travelling, investing in your hobbies like classic cars or even art work. You may even just want to live by the seaside in a little cottage and enjoy the peaceful life. Everyone’s idea will be different, but it is essential that you plan for whichever lifestyle you want.
There are many different avenues you can choose to help you with these decisions and calculations. Speak to a Professional on these matters to help you decide. This website is only here for suggestions and tips to get you started on your next journey.
Whatever you decide, it’s your life and your retirement, so plan for it carefully.
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FINANCIAL AND RETIREMENT PLANS
Financial planning ties in with what we have already spoken about. Super, investing, financial choices and hopefully how to do this all easily. It does all sound daunting, but if you take one step at a time, I’m sure you will get there.
In the mean time, a few other suggestions might help with planning for the near and long term future.
* Look into adjusting any life or health insurance policies; do you need to update them, add extras, consider the costs involved.
* Pay off any High Interest debts like credit cards and/or personal loans. Once paid, the extra money could be added to paying off your mortgage or put into investments.
* If you live in an extremely large house, consider downsizing. It’s not necessary to have a 5 bedroom house now the children have moved out. This will save a lot of money for you in utilities, maintenance and insurance costs.
* If you don’t want to move start by de cluttering your house and instead of building a gym in one of the spare rooms, maybe rent it out for some extra income.
* Increase your savings rates into your Super and any Investment accounts.
Have a clear idea of the future life you would like to lead, and start planning now so you can achieve it.
By focusing on maximizing a constant income and managing debts, Empty Nesters should be able to navigate this next chapter of their life with confidence and excitement.
So the base line for this next part of your journey as far as your Finances are concerned, is just PLAN PLAN PLAN.
The Above mentioned tips can be used as steps towards a more conscious and prepared financial Journey. However, these are only tips and suggestions, and should not be used without Professional Advise. Speak to a Financial Specialist before making any changes to your Finances.
Any links involved on this website are here for your guidance, and I provide them as a sponsored link.