When to save?
Downsize your nest. There are dozens of unexpected ways to save for empty nesters. However, a more traditional approach is downsizing your living situation. According to the AARP Public Policy Institute, in 2009, 29 percent of U.S. households with occupants above the age of 50 spent more than 30 percent of their income on housing. That’s an increase of 20 percent since 2000. Don’t bog yourself down by paying for and maintaining a large home; consider downsizing to a smaller house, condo or apartment for more manageable mortgage payments and savings on utility costs, home maintenance and property taxes. That means more money to spend – or better yet, invest in your saving accounts.
Buy fewer groceries and clothes. Fewer people at home means fewer mouths to feed and bodies to clothe. So, skip the epic shopping trips to Costco and the Mall to cut back on your grocery bill. Remember, you’ll be cooking for just one or two now, not your kids and the entire soccer team. And you don’t have to handle back-to-school wardrobes any longer, so take that budget and put it directly into savings accounts.
Unexpected ways to save. Look into discount programs like frequent flyer, hotel rewards and credit card points, as well as social couponing to save. You can also consider consolidating to one car, reducing the number of cable channels you subscribe to and eliminating a home phone in favor of cell phones to save a little more. Try to contribute these savings to an account monthly or even weekly to avoid spending them.
Contribute more to your retirement saving accounts. Now that you don’t have to feed, clothe and house your children, take the money saved from these reduced expenditures and contribute to your retirement fund savings options. By putting away more money into one of your retirement savings accounts, like a 401(k), IRA or other high-interest savings account , you'll not only reach your retirement saving goals, but you might even be able to reach them faster.
When to spend?
Pay off your debt. Reducing debt is almost as important as saving for retirement. So, after you cut down costs and increase your cash flow, come up with a debt reduction plan that works for your budget. The more quickly you get out of debt, the less interest you will pay over time. And that means more money to spend enjoying the rest of your life.
Take on a new hobby. You've probably spent the last twenty years or more working and/or chasing around your kids. Now that they’re grown, you have more time to invest in your personal development. Check out your local community college’s continuing education classes to learn to use your new digital SLR or brush up on your French for your upcoming trip to Paris. Classes are usually inexpensive and available at night and on weekends. Whether you’re going back to school, gardening, learning to paint, practicing yoga or taking a culinary course, spending your newfound money and time cultivating your passions is a wise investment in your future. Who knows, you may even be able to sell some of your art online or at a local show and contribute to your savings account!
Embark on an adventure. One of the most popular (and rewarding) ways empty nesters spend their money is on vacations. Taking a holiday has the power to reinvigorate your mind and body and expose you to new cultures. Plus, now that you don’t have to worry about the kids, you can take your vacation anywhere you like – and spend more money on pricier destinations, luxury hotels, fine dining, and once-in-a-lifetime activities. However, you may choose to save on accommodations and splurge on activities by staying at a B&B, or rent a cottage in the woods one year so you can go with the whole family to Aspen the next. There are always little ways to save and still enjoy your vacation.
Celebrate your independence
Don't be shy about hitting a night on the town, taking a spa day, having dinner at your favorite restaurant or attending a glamorous opera. You don’t have to worry about a babysitter or a curfew, and with your savings built up, it’s OK to splurge. So, spend a little time (and money) enjoying yourself and your newly discovered “me” time. Of course, if you can find discount nights, coupons, or tickets that support your favorite charity it’s even better!
Sponsored content was created and provided by RBS Citizens Financial Group.
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