It's graduation season, which means that millions of young folks are transitioning from one chapter of their lives to the next. While this presents an opportunity for them to start new lives, it presents an opportunity for the parents, as well.
This is an ideal time to reflect upon your life and set some new goals. If you have children finishing college, you are in the unique position of being able to set yourself on a new course that could bring you into great financial security.
Here's the thing: You've had tremendous resources going to your child for the past 22 years, and ideally, you will soon be in the position of no longer needing to support him or her financially. True, it may take a few months — or perhaps even a few years — before they are entirely financially self-sufficient, but the monthly costs of supporting them will likely be dramatically reduced.
Simply put, the money you've been spending on the kids can now be directed elsewhere. And the decision of what to do with those dollars can have a dramatic impact on your financial future.
As a financial advisor for more than 25 years, I've worked with hundreds of individuals and couples as they've moved into this phase of their lives, and I've seen the contrasts between those people who have used those freed-up funds wisely, and those who have not.
With the kids gone, you are presented with a fantastic opportunity to save for your ultimate retirement. Whether or not you plan to retire in the near future, odds are one day you will retire, and it's imperative that you have the resources to provide for yourself once you get there. If you use this season of life as one to get really serious about saving, you'll put yourself on a path to great financial security — ideally transitioning into a place where your paycheck is an option and not a requirement.
It's tempting to use this freed-up cash to splurge, such as buying that sports car you've always dreamed about. And while some increased spending may be fine, that extra money can actually have adverse consequences. You may find yourself living a larger lifestyle without increasing your retirement savings.
In order to put, and keep, yourself on the path of financial independence, there are five things you should consider at this stage of life:
Now that the kids have launched into independence — or are at least in the process — this is the perfect time to take a good look at your own life. Changing careers, even if it means delaying retirement, may be the most satisfying move you've ever made.56875