4 Ways Empty Nesters Can Use Their Newfound Cash
Once the kids leave home, most parents find that their monthly expenses drop significantly. That means you'll have more cash to spend than you're used to. Do nothing, and that extra cash will disappear into frivolous purchases. But if you immediately give that extra money a purpose, you could dramatically improve your financial future.
Since raising kids is expensive, odds are you have some debt hanging over your head. Credit card debt is particularly insidious, as the high interest rates mean that balances often grow, rather than shrink, over time. Once you have some extra money coming in each month, getting control of your debt should probably be your top priority.
First, make a list of all your debts, putting debts those with the highest interest rates (most likely credit cards) at the top. Next, the minute your paycheck hits your bank account, take any money you don't need to cover living expenses and use it to make extra payments on those high-interest debts. While paying off your highest-interest debt first will save you the most money in the end, many people find it's more motivating to start with the smallest debt and put as much money toward it as possible while paying minimums on the others. This will get the first debt paid off quickly, allowing you to move on to the next-smallest debt until they're all gone.
Source: Fool.com
