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Adjusting Financially To An Empty Nest

Adjusting Financially To An Empty Nest

The adage that the days pass slowly, but the years go by so fast is most prominent when you reflect on the time between a child's kindergarten and high school graduation. If your son or daughter is preparing to leave for college or to start a career in a new city, you may be mentally and financially preparing for an empty nest. 

According to the Bureau of Labor and Statistics, approximately 90% of young adults move out of their parent's homes by age 27. Setting aside the fact that more than half (54.6%) who move out of the house before age 27 wind up moving back home, an empty nest is likely to impact your fianancial plan in one way or another. While 68% of parents surveyed said they enjoy being an empty nester, 66% experience some adjustment period marked by loneliness or grief. The void created by empty beds and schedules can leave parents seeking ways to stay connected with children and also an opportunity to redefine their lifestyles. 

Acknowledging the Empty Nest
Embracing the transition to an empty nest can be difficult, but this milestone allows the parent and child relationship to grow and thrive. Coming to terms with this step and looking forward to what lies ahead can help to make the process of letting go easier.

Parents often find themselves both excited and anxious when facing the reality of an empty nest. Are you dreaming of traveling more to escape Indiana's cold winter weather? Do you want to dedicate more time to your current hobbies or pick up old pastimes you left behind in your youth?

While this transition might seem like a closing of one period, this is also a chance to turn the page and start new. This transformation can lead to inquiries regarding lifestyle modifications, connections, and personal finances.

How Does Your Budget Change?
Now that your child has moved out of their childhood home, they are off the payroll, right? Not so fast! Your child might have left you with an empty nest, but that does not mean they are ready to fly alone. In 2023, over half (51%) of parents supported an adult child living outside their home. This support comes mostly in the form of groceries, cell phones, and housing. On average, parents who support adult chilren spend an average of $1,400.  

If your child leaves home with a good job and no longer depends on your cash flow, it might be time to redirect attention to your retirement plan. If it's been a few years since you re-evaluated your contributions, you can Boost Your Retirement Savings with Catch-Up Contributions.

Changing Finances May Spark Debate
Although the cash flow may or may not change with the departure of a child, there are a few changes that you'll want to acknowledge. The onset of an empty nest may alter the dynamic between partners. Conflicts that simmered beneath the surface when children lived at home can go unresolved for years and surface. If couples spend little time together alone while raising children, instead focusing energy on the kids, this can be a recipe for divorce. Be sure to invest in the relationship to build a solid foundation with each other rather than only with the children. 

Even seemingly happy couples may cope differently with the adjustment to an empty nest leading to disagreements. If one perceives the newfound liberation from children as exciting while the other is miserable, the disconnect can be upsetting, leading to marital disharmony. If your partner experiences a mourning period, ensure that they feel heard and supported emotionally as they work through the transition. However, if he or she refuses to let go of a son or daughter, constantly checking on them, this behavior may necessitate intervention. In that case, your partner may require reminders of healthy boundaries to encourage the child's independence.

Some couples disagree with financially supporting children after moving out of the house. If you cannot agree, remember to ensure you are stable before supporting an adult child. Do not put your retirement plan at risk to bail out a child. Remember, your adult child has a long time horizon with three or four decades to work and save. Young people have the opportunity to recover financially from mistakes. Sometimes living through the consequences early in adulthood can prevent major consequences later in life. 

If, as a couple, you disagree on spending money on yourselves, the likely root is fear which may manifest itself in anger. Uncover the cause by asking your partner questions without judgment. For some, money is a source of protection, providing comfort from the dread of exhausting their funds. If this is the case, meeting with a financial planner can help to relieve some of this anxiety. If, on the other hand, your partner regards money as a ticket to autonomy, provide him or her an allotted sum for satisfying wants, such as travel, pampering the grandchildren, or taking up new interests.

For most people, money is a combination of both security and independence. While couples don't always agree on spending, through a healthy dialogue they can gain insight into what money symbolizes to their partner.

Final Remarks
Transitioning into an empty nest can be a considerable challenge, particularly from a financial perspective. Nevertheless, with the correct preparation and knowledge of your financial objectives and what money means to you, you can confidently navigate this stage. 


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