You did it!
You paid off your home, you outright own each of your cars, and best of all, you put the last of your kids through college.
But four years of $9,650 tuition for an in-state public college, or $33,480/year for a private college, may have left you financially stretched. Especially if you paid for 12 years of private school tuition on top of that.
While most of life’s major money milestones may officially be behind you, you know all too well how an unexpected tax bill or climbing nursing home costs for mom and dad could potentially take a toll on your savings.
Should a major expense arise when your savings are still low, depleted from years of supporting the next generation, it could leave you struggling to afford your own expenses.
It’s time to turn the attention back to yourself and prioritize your own financial needs first. Here are some steps to get you started…
Support But Don’t Enable
Some believe continued financial support your adult children post-grad could not only be hurting your own savings efforts, it could also be hampering their ability to master critical financial skills like budgeting and saving, leading to the greater possibility of dependence on you going forward.
If you do want to support your adult children financially, budget a set allowance that won’t interfere with your own savings goals, such as retirement, and stick to it.
Rebuild Your Emergency Savings
If you don’t have six months worth of living expenses in accessible savings, it may help to prioritize building up that cash cushion to act as a buffer, protecting you from the financial strain of unplanned, emergency expenses.
While projecting your cash cushion needs, you may also want to take into account your own health and family history, considering the costs of the potential medical and long-term care needs that can arise in the later years of life so you can plan and save accordingly.
Reconsider Your Expenses
One of the best ways to free up cash post-kids is to reconsider your regular expenses. For example, you may no longer need the big four-bedroom home with a backyard and family living spaces. Downsizing to a smaller home can generate immediate cash flow as well as savings in the longer-term thanks to fewer maintenance and upkeep costs.
Also account for the money you spend every day that you might be able to save.
Take Stock of Your Debt
If you’ve incurred any debts while supporting your children through their college years, or in the aftermath, while funding your own life, use this opportunity to get proactive about your debt pay back.
Make a list of each of your debts, the current balance, the APR and the monthly payment amount for each, then plug your information into a simple debt consolidation calculator to see how much you might stand to save by consolidating your debt with a personal loan.
Personal loans offer fixed rates and fixed terms that can help you save hundreds, or even thousands of dollars by eliminating higher-interest debt.
By being proactive with your debt pay back – taking inventory of your debt and exploring options like consolidation and personal loans – you can uncover significant savings to help you rebuild your financial life post-college funding better and stronger than before.
Consider Your Own Savings Goals
After 18 years of raising kids and another 4 prioritizing their educational funding, it may be time to get a little selfish with your savings goals.
Consider what you want by defining your five to 10-year goals and thinking about what you’ll need, financially speaking, to support those lifestyle aspirations.
Once you’ve defined what you want and the cost of achieving it, break each goal down into a tangible next step.
For example, if your 5 year goal is to take a trip around the world, your next step might be researching the costs of your potential trip itineraries, then dividing that price tag by five to calculate how much you’d need to save up each year to afford that savings goal.
Take the time to get specific about you want and get clear on what it’s going to take to get there – setting aside savings, paying down debt and taking action in service of yourself first.