Budgeting For Your Now Empty Nest
The empty nest period, when your children grow up and move out, thus leaving the warm, cozy, nest you have lovingly created can be challenging. After all, it represents a complete change in the entire household dynamics. Fortunately, if you approach it correctly, this period can also be one of the most adventurous and exciting of your lives. In essence, this is a time in which you and your spouse are able to once again focus on each other, travel or complete long-term goals you had been putting off while rearing children. Read below for everything budget related you need to know to thoroughly embrace the empty nest phase of life:
- Embrace Retirement Preparation: Before your kids left home, you were financially responsible for them. Even during their college and young adult years, you probably supported them at least somewhat financially. However, once they are truly on their own, it’s time to look towards your own best interests, in the form of retirement. A great rule of thumb to embrace is to reroute all monies you previously spent on your kids for meal plans, housing, clothing, or groceries to feed them, towards a low-risk retirement account.
- Understand Your Kids Might Boomerang: According to Mint, some 20% of parents over the age of 50 have adult children who have returned to the nest, after their inaugural flight. This is a byproduct of many factors, and is often no fault of the adult child. However, that doesn’t mean you have to allow your adult child to live off you for the rest of your life. Instead, work with them to create an attainable goal of independence. An adult boomerang is unfortunately something many empty nesters have to face, so being prepared for at least the possibility is wise. Talk to your children ahead of time and let them know if they ever have to move back in with you, here’s the ground rules. They will have to pay rent, purchase groceries, etc. whatever you feel is fair. Let them know before it becomes an issue.
- Returning Adult Children Aren’t All You Might Have to Deal With: In addition to boomerang adult children, you might also be forced to help your aging parents more and more as they approach their twilight years. Sometimes, the most cost-effective way to help your parents is moving them in with you, so you don’t have to help them fund housing. Other times, they need the kind of skilled care that requires them to live in a facility. Research programs to get them as much help as you can during this time of their lives.
- Don’t Forego Your Budget: While the empty nest years can be one of financial freedom and increased disposable income, don’t go crazy. You still need a budget as this is not the time to forget all your long-term financial goals. Yes, it’s possible to travel and enjoy this unique time of your life, just don’t do so to the detriment of financial responsibility. It’s a good idea to outline a new budget that takes into account your children being out of the house. You will likely note a drastic reduction in food costs and the extra expenses, such as sports and school related costs that come along with raising children. Make sure you tell this now freed up money where to go via a newly created budget, or it will quickly disappear.
Keep the tips listed above in mind as you embrace the empty nest years.