My husband and I were raising a little girl in the late 1980s and are now empty nesters. So much has changed since that time and now that little girl has three little boys of her own (well, really, they are little bits of my beating heart that happen to have legs and are roaming this planet). Many of you cannot even imagine a time before the internet. Back then, you didn’t Google to find out why your baby will not stop crying. Or when a temperature is high enough to call the doctor. Or how to manage your finances.
You either consulted a family member/friend or cracked open a book. The huge advances in technology and the accuracy of the information available on-line has changed everything. However, there are some universal ideas I want to share with you from the viewpoint of an empty nester that you may find helpful wherever you are in your life.
1. Check your herd mentality.
Often the majority is the majority for a reason and they may be on the right track. But sometimes, the herd is just doing what herds do. Question if you’re doing things a certain way just because that’s the way they’ve been done for years. For instance, many people use traditional banks, paying traditional bank fees. If you have never evaluated the possibility of using a credit union, think about doing this. There used to be valid objections like the number of locations but internet banking and photo depositing have changed that. And unless you insist on receiving paper statements, there will likely be no fees for a savings and checking account.
The fees that do exist are not meant to be moneymakers. The overdraft fee at my credit union is $5. (Not that I know this firsthand. Bonus tip here: make sure you record all your automatic withdrawals ☺.) Another one: just because everyone is refinancing again because you just can’t beat the new rate, be sure to run your own numbers. Make sure you’re prepared to start back at the beginning, paying the maximum interest and minimum principal. Apply the herd check to your financial decisions and you may find a better way.
2. Round up the mortgage payment.
Some will argue about prepaying your mortgage, especially if you have one of the great rates available in recent years. But rounding up to the next $100 bucks can make a significant dent in the principal and amount of interest you pay, especially if done early in the mortgage. Looking back at our early statements, the initial round-up amount was $30.71. And at the beginning of the mortgage, that was huge. Yes, you may be able to put that amount in the market, compound it and come out better but we don’t regret this move.
3. Evaluate the move up in housing.
As your family and/or finances grow, most of us aspire to move up the housing chain. In addition to the increase in utilities, taxes, insurance and maintenance, be mindful that there will be additional square footage to update when you are tired of cleaning all that room. While you may think you can do these updates in DIY mode, you may need to take age and health into consideration. Even hiring out the job can test your patience and budget. While your family size may require moving up, it may help down the road to consider the minimum square footage and amenities that meet your requirements.
4. Schedule chore time for free, quality time with your children.
What I mean by this is expose you and your children to mind-numbing chore time that causes mindful interaction when done together. For instance, I noticed that when without a dishwasher, we had the best conversations while washing and drying dishes together. Especially as they get older, fold laundry together. Shell peas on the porch. Sort photographs. The conversation will come and you will learn things you didn’t know. Practice actually scheduling this time to deepen relationships. Double bonus: this is budget-friendly time and you get household chores done.
5. Skip the latest and greatest.
If you are reading this blog, you are probably already applying this to vehicle purchasing. But take a look at other consumer areas of your life such as electronics, clothes, kitchen gadgets and toys. Applying this to these categories is harder but will significantly impact your financial fitness. There are times when you need to make exceptions (children should have access to appropriate technology for their education) but you can be selective and improve your bottom line, month after month, year after year. These small, daily decisions could have more impact than the large ones you make.
6. Invest in your physical health.
I know you’ve heard this before but the importance warrants its appearance in this line up. It’s easy to take good health for granted in your 20s and 30s. Pay particular attention to stress relief. Before you recognize the physical symptoms, stress may have made an impact on your health. I’m encouraged to see our medical community finally embracing alternative medicine so get your yoga on, disperse some essential oils and consider a round of acupuncture. Being physically fit will make paying attention to your financial fitness easier.
Read also: Natural Remedies For Stress and Anxiety
7. Monitor your savings rate.
Aim for a slight pinch. Over time, you will eventually adjust your spending. You will begin a positive cycle of periodic savings rate increases.
Read also: Experiencing Happiness With Less
8. Share the appropriate financial information with your children.
While you don’t need to divulge every detail, sharing the rationale for certain decisions will serve as the basis for the financial education they probably won’t get in school. Basic investment and compounding discussions help take the mystery out of it and may light the curiosity flame.
9. Prepare for misfortune.
Have a basic will and plans set up for the care of your children and spouse in the event of tragedy. You may think this is not necessary when you’re a young adult but Lady Fortune is sometimes cruel. Don’t invite further disarray to your family while they may be dealing with the unthinkable. It may help with costs if you plan in advance before meeting with a lawyer. Just do this one.
10. Embrace the silly.
Okay, so this is not a financial thought. But I wanted to leave you with a fun item. The things you will hear about decades from now from your children and theirs will be the result of executing the silly. Make the dog a beefy birthday cake, complete with candles and singing. Get your picture made with Santa and the Easter Bunny. Celebrate half birthdays. Sleep in the living room in a tent. Make these pancakes and eat breakfast outside. Enjoy them for the short time they are entrusted to your care. They’ll be back for visits, bringing new little chicks to your nest.