It’s a good idea to re-evaluate your cash flow once your children are in college.
If you provide financial support for your college-aged children, it’s good to have a budget that both of you can work through during their college years
If you are not supporting your college-age children, you can reevaluate how you may want to use extra monies you may have so that you are conscious about where the additional funds are going and they are not just spent on “lifestyle creep” like going out to eat more, vacations, clothes etc.
It’s a good idea to know what you are truly spending on your monthly expenses. This will really help as you plan for retirement to get close to the amount of money you actually will need to retire.
It used to be that people said they needed a million dollars to retire – which is difficult because that amount is too large to configure daily, weekly, and monthly needs.
A better approach is to discern how much money is needed every month to live. With kids, it may be much larger than without kids.
Once you are no longer supporting children is very important to calculate how much money you need to live on every month post children.
It’s important to create a line item in your budget for such things as gifts, holiday gatherings, family outings, and others. Then, open high-yield savings accounts named for their purpose and make consistent deposits to have those funds available.
While children are in school, you can consider other line items for college visits, hotels, and family outings.
Credit cards used responsibly can also be used for travel points.
Holiday gifts can be for helping pay for travel expenses as children travel back and forth to family gatherings.
Depending on income and what has been saved, you can consider using additional money you have due to children moving out, as additional investment funds. Always be clear about pre-tax or post-tax accounts so that you don’t have all your funds as a taxable event when you retire.
The best time to consider Long Term Care insurance is between 50-60 years old. Additional funds could be going to this type of investment.
It’s also a good time to invest in yourself. Spend money on all of your hobbies and desires that you may have put off during the childrearing years.