Borrowing Tips for Empty Nesters
CHARLOTTE, N.C., September 19, 2006 – The children of empty nesters have been a top financial priority for empty nesters, commanding a lot of time, money, and mental energy. While some may continue to offer their children financial support, their attention needs to turn to other priorities.
According to LendingTree President Anthony Hsieh, “Empty nesters’ key financial issues may include any, or all, of the following: paying off college loans for their children; supporting their aging parents; ensuring they are prepared for retirement. It’s a critical time to review your financial situation and make sure you have your ducks in a row for the coming years.”
As a part of its ongoing mission to empower borrowers, LendingTree provides the following list of tips to help empty nesters make important financial decisions:
1. Keep liquid savings on hand when helping children. Empty nesters may find they would like to give their children small cash gifts such as down payments for cars or other immediate needs. Others may want to help in big ways such as paying for weddings, first homes or college loans. In either case, it is a good idea to take a percentage of the money you used to spend on them and set it aside for a future event when you would like to help financially.
2. Choose the right repayment plan when paying off college loans. Parents can choose to take a PLUS loan, which is a federally sponsored loan just for parents and has similar options as student loans. The key difference between a PLUS loan and a student loan is that you begin repaying PLUS loans as soon as you borrow the money. There are a number of options with this loan, including standard, graduated, income-sensitive, extended and consolidated. If you can afford it, a faster repayment schedule with the standard option will get you out of debt sooner and result in lower interest payments.
3. Continue to teach your children smart financial habits. As parents become empty nesters, many experience social pressures to ensure their children exceed the standard of living of past generations. These feelings coupled with high consumption pressures can create a false sense of security for children as the parents continue to support them financially. Ensure you create a structure to help your children succeed on their own by helping them manage their budgets independently and take ownership of their spending habits.
4. Take responsibility of financial planning if you are supporting your parents. Some empty nesters find they are contributing financially to their grown children as well as their parents. These empty nesters are often referred to as the “sandwich generation.” It is critical that you manage both sides effectively so you do not become overextended. Speak with your parents about their specific financial needs, so you can help them in the best way possible. Emergency savings are the most critical at this point in life when others are depending on you.
5. Consider scaling down your home. When children move out and finally become independent, the result can be a large empty home. Aside from being exhausting to maintain, if it is highly valuable, the property taxes may be an unnecessary burden on your budget. Additionally, by moving into a smaller home, it can free up equity to be used elsewhere.
About LendingTree, LLC
LendingTree, LLC is the nation’s number one online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 20 million loan requests and $152 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, and credit cards via www.lendingtree.com and 800-555-TREE.
Founded in 1998 with headquarters in Charlotte, North Carolina, LendingTree, LLC is part of IAC Financial Services and Real Estate, an operating business of IAC/InterActiveCorp (NASDAQ: IACI), which also owns or operates LendingTree Loans, LendingTree Settlement Services, LLC, GetSmart®, RealEstate.com®, Domania®, and iNest®.