Your children have grown into adults and have flown into new lives and homes. Now, as an empty nester—a parent whose adult children have recently left home—you have not only more time but also more money.
With this reality comes new financial freedom. Make the most of it with a budget!
1. Give Your Children True Independence
According to the Pew Research Center, more than half (59%) of parents say they’ve financially supported their adult children at some point. Now that your children live independently, you can cut the cord, even if you do it slowly. You can gradually stop paying for bills on their behalf, such as cell phones, student loans, insurance, and food, if and when they can afford these things on their own.
2. Remove Your Children From Your Insurance
Removing drivers from your household plan can lessen your insurance premiums. Additionally, having fewer people in the house means you have fewer items to insure. And, as your children need less financial help from you, your need for life insurance decreases.
3. Cut Down Your Emergency Fund
While you should always have an emergency fund, you no longer need to prepare for injuries at sports games or unintentional domestic crises like flooded bathrooms. Now that your children have grown and left your home, you can trim down your emergency fund to make it more suitable for a smaller household. Lowering your emergency funds frees money that you can turn around and deposit into your savings and retirement accounts.
4. Recalibrate Your New Household Budget
Considering you’re likely spending less on groceries and are no longer saving for emergencies and educational expenses, you’ll have more money to spend on yourself. Recalibrate your new household budget and allow yourself to spend more here and there. Treat yourself!
5. Downsize
You may want to consider downsizing your large family car, if you have one, now that you have a smaller household. Relocation may also be an option if you have a house better suited to a large family and now live alone or with only one other person. Talk to a realtor about selling your home—moving into a smaller home can give you additional money to save and even some to spend on yourself.
6. Return to Work
You may not have to downsize or worry about cutting off your children if you’re healthy and interested enough to return to work. Returning to work can help you think less about the emotional strain of living as an empty nester. Moreover, it can take extra time off your hands while giving you extra income to pursue what matters to you.
7. Redirect Money Saved Toward Retirement
You can redirect the money you save by downsizing toward your 401(k) or IRA plans. This will boost your retirement savings and may put you closer to your retirement and financial goals. Make it a priority to talk to a trusted financial advisor to learn more about your options.
8. Prioritize Debt
You may be retired, near retirement, or 10 or 15 years from full retirement. Paying off debt now clears space for savings so you can save money to live your best life. These debts may include student loans, credit cards, or mortgage payments—whatever they are, prioritize paying off any outstanding debt to increase your financial health.
9. Fund Your Hobby
If, like most empty nesters, you find yourself with extra time and money and without a clear direction of what to do with these resources, find new ways to spend your time that don’t require large spending increases. Take up that hobby you’ve been thinking about, or try learning something new!
10. Declutter Your Home
Take a good look around your home, identify the clutter, and sell it. Consider planning a garage sale or posting listings on eBay, Craigslist, or OfferUp. This can create extra cash for you to have on hand while giving you the extra space to create a side hustle or take on a new hobby.
11. Purchase a Financial Planner for Your Adult Child
Teach your kids to make healthy financial decisions by paying for a financial planning session for your adult children. This way, your children can create a financial plan and become less financially reliant on you. If your children learn to save properly and avoid descending into credit card debt, this can protect you from later becoming their financial resource.
12. Change Your Spending Habits
Your household budget no longer needs to include child-related expenses. Make the relevant budget changes because, without the adjusted parameters, it’ll be easy to overspend. While splurging on things you don’t need may sound tempting, it’s best to save when possible.
13. Consider Your Family’s Financial Future
You may never fully stop supporting your adult children. And if that’s what you want, then that’s okay. A family unit is, first and foremost, a support structure. Whatever the case, speak honestly about your intentions with your family—that way, you avoid confusion and surprises.
14. Plan Your Estate
It’s never too late to get your estate plans in order. You might want to talk to a financial advisor to help you plan this long-term financial goal, or you can simply leave your family clear instructions about your desires and intentions. Talk to a lawyer about drafting your will if you haven’t already, or make sure to update your existing will periodically so you can account for new additions to the family, like spouses or grandchildren.
15. Try Minimalism
A minimalist lifestyle won’t work for everyone, but that’s no reason to avoid trying it. Along with your children leaving comes the opportunity to declutter your home, eliminating unnecessary items that simply take up space. You can also declutter your life by taking a minimalist approach to your budget to ensure you’re purchasing only things that align with your needs and values.
16. Create New Goals
As an empty nester, you may find yourself with extra money lying around. And while it’s important to save for emergencies and retirement, it’s also important to create joy and live a lifestyle that matters to you. Try something you’ve always wanted to do, like traveling overseas or purchasing a new patio or kitchen set.
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