You have spent years putting your kids first and making sure that all their needs are taken care of, but now that they have gone and you have officially become empty nesters the financial focus can shift towards what you want to do with this new chapter in your life.
The fact that you no longer have any kids living with you at home will often mean that you are heading towards retirement age, so there are plenty of financial plans to be made and ideas to budget for.
Here is a look at how your financial situation might change as an empty nester, plus some insights on how to prepare financially for “boomerang” kids and other modern-day scenarios that impact the over fifties generation.
Disposable income boost
There will have been plenty of times in the years of raising a family where you might have even wondered what a disposable income actually looks like, but in an ideal world, if you have sorted out the last child’s college education and they now have jobs too, you will suddenly discover that you have more money to yourself each month than ever before.
Even if you managed to achieve that perfect storm and set the kids on their way into the world with a college education and even a bit of financial help to get them going, it would be a good idea to take stock of your finances and set a budget, before going ahead with a overdue spending spree.
There are also some potential financial setbacks that you might want to consider.
It is a fact of modern life that as many as 20% of parents in their fifties who have waved their kids off to college or a life of presumed independence, suddenly and unexpectedly find them back on their doorstep or at least looking for some financial support.
The majority of empty nesters are estimated to have given their adult children some money at some point in the last five years, so you have to consider the possibility that the financial purse strings are not completely severed forever, even when your kids leave home.
This is a modern phenomenon and a bit of an issue for many vexed parents in their fifties, who simply don’t know how to budget for helping out their adult children, as it is not a scenario they are familiar with from their own life experience.
If you are a new empty nester or about to become one at some point soon, it would make a sense to address that issue and make financial provisions for helping your kids at some point in the next five years from their leaving date.
The current generation of empty nesters are probably the most overburdened in terms of helping their kids out with money and with living and housing costs so high in many city areas where the work is, it would seem that a strategy to budget for this potential situation would be a good idea.
A boomerang budget
If you have to account for “boomerang” kids in your budget, there are ways to reduce the impact of their financial requirements so that you can still get to do the things you want to do as you head towards your retirement years.
It might have been some while since you sat down and worked out a household budget and you might be out of practice, but it makes sense in those circumstances to work out exactly how much disposable income you have left to work with each month after you cover all your expenses.
One way of keeping tabs on your expenditure would be to use a new rewards card recently launched by Chase. If you clear the balance each month it would be a good way of tracking your spending by using the card for most purchases, plus you get the added bonus of racking up some points that you can spend toward something good like a vacation.
Many of us carry a smartphone around with us most of the time so you might want to consider downloading an app that helps you keep track of your expenses and lets you monitor your spending in real-time.
You can celebrate the opportunity to become a couple again after the kids have moved out of the family home, but without trying to dampen the mood too much, it would also be a good idea to learn how to budget for occasionally helping your adult children, and maybe even making provisions for the care of aging relatives.
Grace Summers has had years of experience of perfecting the family finances so that money gets saved for the kids’ education as well as her and her husband’s retirement funds.