Simple ways to avoid overspending as retirement nears

NORTH COUNTY – When the nest is empty and the kids no longer need financial support, many men and women find themselves with some extra money in their budget. Fewer mouths to feed and no more college tuition bills can give parents a sense of financial freedom they may not have had since before starting their family. However, that freedom can also lead to overspending, something that can put retirement in jeopardy if people are not careful.

Though it’s understandable for men and women to splurge on a well-deserved getaway once the kids have finally left the house, it’s important for adults to ensure that such splurging does not become routine. The following are a few ways men and women with some newfound disposable income can avoid overspending and putting themselves in financial hot water as they get closer to retirement.

• Pay with cash whenever possible. Swiping a debit card or credit card is certainly a convenient way to shop, but it can also be dangerous. Many people find it difficult to keep track of their spending when they use debit cards or credit cards to make their purchases. Using cash to make purchases, especially daily purchases like a morning cup of coffee, reduces the likelihood of overspending.

• Keep a financial journal. Men and women who must adapt to having newfound disposable income may find it is not much different from younger men and women learning to manage their money when they first start working. Some of those lessons, like saving more than one spends, might need to be relearned.

A way to easily track spending is to keep a financial journal to track daily and monthly expenses as well as larger purchases like a new television. Write down the usual monthly expenses each month, such as a mortgage payment or a car note, and each and every purchase made, including how much is spent on dining out each month. Do this for at least a couple of months then examine the journal to see if there are any expenses that can be trimmed to save money.

• Don’t go overboard rewarding yourself. Once their last child has left the nest, the temptation to reward oneself with a luxury item or two might prove overwhelming. After all, raising a family and paying for college tuition has no doubt required substantial sacrifice, so it’s well within reason that parents want to reward themselves after all these years. They should avoid overdoing it so their finances aren’t stretched too thinly. Luxuries can be nice, but they can also drain a budget. Monthly expenses once the kids have moved out should be lower, so if parents find their cost of living has increased now that their nest is empty, they might be forced to determine which expenses are luxuries and which are necessities.

• Take advantage of applicable discounts. Though accepting a “senior” discount might be hard for some to acknowledge, it also can be a boon to the financial bottom line. Many establishments, including gyms, restaurants and movie theaters, offer discounts to men and women age 55 and older. This can help save a substantial amount of money over time.