Kids moving out impact on FIRE spending

[JohnKeating]

The DW and I were chatting this weekend regarding our FIRE budget and what affect the kids moving out will have on it. We're not planning to RE until they're out of the house so this may be something we should take into consideration.

Our current FIRE budget is based off our current spending and I run various scenarios off of that. Very basic but a decent place to start.

Anyhow, during our discussion I asked DW how much our spending (not including mortgage) would go down once both our two kids move out. Don't worry about traveling more increasing the spending, or helping the kids out with things, or expensive new hobbies now that we have time, or anything else that could happen. This is just a rough number for scenario generation purposes based on kids impact to spending.

Simply, how much of our current spending is tied to the kids?

Of course this will be different based on number of kids and kid ages but in general for people who have raised kids and they have moved out did you notice a significant reduction?

During our conversation DW's initial answer was the kids (we have 2) are 50% of current spend. That shocked me she thought it was that high. I was more in the 20-25% range based off some very rough mental math.

So, what do you all think? What % do you think? Has anyone every done a real calculation on this? Just curious to get other people's thoughts.

John

 

[USGrant1962]

Setting aside college tuition, I would guess our spending dropped 10-20% when the tax deductions moved out.

Food dropped noticeably, utilities a little, recreational spending on them dropped but wasn't huge (except for some vacations that we still take them on). Taxes are up a little. I don't see how spending could possibly drop anywhere near 50% unless you move to a smaller house (or were counting tuition?).

 

[bclover]

LOL my twenty something recently college graduates moved into their first apartment. unfortunately for me it's only about 1.5 miles away so my food bill has not gone down at all.

but they definitely don't chew up 50% of my budget. as @usgrant1962 mentioned I'm still in the same house so my utilities dropped a bit but not drastically.

 

[John0019]

OP, from a quick mental thought I'm guesstimating (w/o college) without our 2 sons at home it is somewhere in that 15-20%ish neighborhood. Would like to put college aside, but in our case paying for that right now...at least in the home stretch with youngest who graduates in May...that will be a definite windfall for us. Anyway my .02.

 

[JohnKeating]

Thanks. 10-20% seems about right. I'm sure most of it'll get reallocated into our other spending but I will use this a bit in some RE scenarios just to see how much it could affect things.

John

 

[lakerunner]

Also be realistic about when the kids are actually off the payroll. We have a son in college, but I am assuming we will still help him get on his feet after graduation. We are fortunate that we can do that and retire. Plus he has been on a scholarship so we saved a lot of what we would have spent on him.

 

[SumDay]

Setting aside college tuition, I would guess our spending dropped 10-20% when the tax deductions moved out.

Food dropped noticeably, utilities a little, recreational spending on them dropped but wasn't huge (except for some vacations that we still take them on). Taxes are up a little. I don't see how spending could possibly drop anywhere near 50% unless you move to a smaller house (or were counting tuition?).

What he said. Getting two boys off our car insurance, cell phones, health insurance, and out of our refrigerator was a huge boost. Fixing their cars were no longer our problem. I'd say we were instantly 25% more flush. ANNDDD... there was a whole lot less flushing at our house too, so the water bill went down.

 

[DawgMan]

Well, that's a tuffy. Kid 1, 2, & 3 are all out on their own and sufficient (for the most part). Kid 4 just landed her grown up job and we expect her to be in the nest up to 12 months. All are local except for 1. We also have 1 granddaughter now. While the fixed costs for the kids has gone down, I have noticed the discretionary $$ has picked up... especially for the GD!. Additionally, we have picked up the pace (and expenses) of doing more elaborate trips/other with the kids, especially those things that require good physical health, now while we can. Example.. I'm taking the man cub to play Pebble Beach in a couple of months for his 30th Bday. Fixed costs are definitely down, but discretionary is up! Hey, that's why you saved all that dough... now go blow it!

 

[cathy63]

We have one kid. When she went off to college (too far away to come home on the weekends) we were still working and our lives continued on normally. Our electric and water usage went down by 25%. That's not to say that the bills went down by that much because there are various flat fees and minimums that aren't tied to usage. Food (including dining out) went down by 35%. Car insurance was the only other category that went down, but not that much since she was just a driver on our cars and didn't have her own.

 

[ckelly78z]

On Saturday, I helped my 21 year old son (youngest of two) move into his first apartment with a good friend of his. My 25 year old daughter just got married in October, but has been on her own for 5 years.

He kept an oil filled heater going in his room for 6 months until he turned his window A/C unit on for the Summer. He would take at least 1 hour long shower every day, and seem to make things in the fridge disappear like magic. We fixed a decent sized meal every night, but had no leftovers, he would keep eating until gone.

My point is; We love our son, and he loves us, but my DW, and I only use 1/2 the electricity, 1/2 the food, 1/2 the water, 1/2 the car insurance, 1/2 the gasoline, and 1/2 the cell phone bill. We no longer have to buy supplies in bulk, or find empty cupboards, or a fridge.

 

[USGrant1962]

I'm guessing that OP's DW was thinking about "shopping" expenses dropping by 50%, which may be true. But fixed costs won't change very much.

 

[SecondCor521]

I'm 50, FIREd, with:

1. DS24, who is a senior in college and lives with me full time.
2. DS19, who is a sophomore in college out of state.
3. DD18, who is a senior in high school and lives at her Mom's house most of the time.

68 cents of every dollar I spent over the last six months was either college or child support. Of the remaining 32 cents, I don't split it out but would guess than less than 2 cents of it would be expenses related to DS24. He uses some utilities, eats some food, and I give him rides to school most days, so some car expenses are attributable to him. So when he moves out, I'd expect my expenses to drop by 5-10%.

Obviously the college expenses and child support are biggies in my budget. Three more child support payments until DD18 graduates and that is done. College was saved for over the past two decades, and it looks like there should be enough with some left over, so even though it flows through my budget it's sort of separated off to one side as it comes out of the college accounts which are separate from my FIRE stash. The only crossover is I currently pay $4K per kid per year college expenses out of pocket for the AOTC.

 

[pb4uski]

My guess would be 5-10% at most. Even if it is $50/week for food and $50/month for utilities that would only be $3,200 a year.

 

[tb001]

Is it really just food and utilities though? We have two young kids and school/childcare and college savings alone are 20% of our budget. There’s easily another 5% on kid related stuff in our budget and they don’t really even eat much at this age! Childcare and school will go away as they get older, but I would assume that gets replaced by more expensive activities, clothes, toys, braces, car insurance, etc...

I will be happily surprised if our kid related costs go down significantly as they get older. Right now just copays for all the medical stuff is probably 2-3% of our budget. Let alone the added costs of health insurance.

I’m curious as we have young kids and this is a huge wild card in our plan. One of the key pieces of RE for us is that the kids don’t get short changed, so I’ve tried to bake in the extras. IIRC, our spend goes down by about 20% once the kids are launched. And that’s purely based on cutting college savings, extracurricular, medical, etc. I don’t think food or utilities were even in my numbers.

 

[daylatedollarshort]

We spent around $10K - $20K per year per kid, with health care being a real wild card and not including college costs. Medical, dental, braces, cars (car costs, insurance, gas, repairs, AAA, registration), groceries, sports, clothes, cell phones, family vacations, prom, family dinners out, parties, higher umbrella liability insurance rates, gifts, extra utilities - it all added up.

 

[SecondCor521]

@tb001, it is for me. Only my DS24 is living here, and the college deal I make with my kids is that once they graduate high school, I'll pay the necessary college costs but everything else is on them. So from the things you list:

school - included in college. I've finished paying for my daughter's high school except some school fees which are not much.
childcare - not needed at age 18.
college savings - finished that about five years ago. Have enough to cover everything unless something very weird happens.
food - already mentioned. DS24 maybe eats $150 of food a month.
activities - on them
clothes - on them
toys - on them
braces - done
car insurance - on them
copays/medical - on them, although I have given some thought to paying for some of the more expensive stuff. Conflicted on this point.
health insurance - on them, unless required for college, in which case included in college
extracurricular - on them

@daylatedollarshort additional categories:

dental - I pay for this currently. Part of the angst about medical alluded to above
cars - on them
groceries - included in "food"
sports - on them
cell phones - on them, although I pay for DS24 as his is like $10 every 4 months.
family vacations - on me if I'm going, on them otherwise
prom - on them
family dinners - same as family vacations
parties - on them
umbrella - on me, why would that be a kid-related expense?
gifts - on them, unless I'm giving them gifts

So yeah, for me it's pretty much food and utilities and some car expenses, as I said before.

The one thing I could allocate to "kids" is that I have a 1758 sqft house, and if it were just me I only need about 1100 sqft of that. So I could downsize, but I like my house and don't feel like moving.

 

[daylatedollarshort]

@daylatedollarshort additional categories:

dental - I pay for this currently. Part of the angst about medical alluded to above
cars - on them
groceries - included in "food"
sports - on them
cell phones - on them, although I pay for DS24 as his is like $10 every 4 months.
family vacations - on me if I'm going, on them otherwise
prom - on them
family dinners - same as family vacations
parties - on them
umbrella - on me, why would that be a kid-related expense?
gifts - on them, unless I'm giving them gifts

So yeah, for me it's pretty much food and utilities and some car expenses, as I said before.

The one thing I could allocate to "kids" is that I have a 1758 sqft house, and if it were just me I only need about 1100 sqft of that. So I could downsize, but I like my house and don't feel like moving.

Our umbrella insurance rates are higher with younger drivers living at home, even when they had their own cars registered in their names with their own car insurance policies. I called around about that but couldn't find a way to take them off our umbrella insurance if they were living at our house, so that was another $600 or so a year.

Gifts were our gifts to them. The amounts I listed were what we were spending when they were in high school / junior college. They had part-time jobs for spending money in college for things like concerts, dates, movies and Xbox games but didn't make enough to pay $2K for car insurance or $1K for a major car repair bill. And if we went out to eat or went to Hawaii or Europe for vacation, of course we covered their expenses.

 

[ckelly78z]

When my DD got married last year, she was able to get health insurance through her new employer, so my cost went down $20 per week (paycheck) from $92 a week to $72 a week. If my son can get insurance through his work when he clears the probationary period, my health insurance will be reduced by another $20 a week to $52 a week for Me +1 (DW). Between the two of them finding good jobs, and moving out, I should save $160 a month JUST on health insurance.

I think my DS's car insurance is $850 a year that is piggybacked on our own insurance....another $70 a month that he will start paying.

 

[tb001]

@tb001, it is for me. Only my DS24 is living here, and the college deal I make with my kids is that once they graduate high school, I'll pay the necessary college costs but everything else is on them. So from the things you list:

school - included in college. I've finished paying for my daughter's high school except some school fees which are not much.
childcare - not needed at age 18.
college savings - finished that about five years ago. Have enough to cover everything unless something very weird happens.
food - already mentioned. DS24 maybe eats $150 of food a month.
activities - on them
clothes - on them
toys - on them
braces - done
car insurance - on them
copays/medical - on them, although I have given some thought to paying for some of the more expensive stuff. Conflicted on this point.
health insurance - on them, unless required for college, in which case included in college
extracurricular - on them

@daylatedollarshort additional categories:

dental - I pay for this currently. Part of the angst about medical alluded to above
cars - on them
groceries - included in "food"
sports - on them
cell phones - on them, although I pay for DS24 as his is like $10 every 4 months.
family vacations - on me if I'm going, on them otherwise
prom - on them
family dinners - same as family vacations
parties - on them
umbrella - on me, why would that be a kid-related expense?
gifts - on them, unless I'm giving them gifts

So yeah, for me it's pretty much food and utilities and some car expenses, as I said before.

The one thing I could allocate to "kids" is that I have a 1758 sqft house, and if it were just me I only need about 1100 sqft of that. So I could downsize, but I like my house and don't feel like moving.

Ah yes, I was thinking more the transition from truly being a dependent (e.g. the high school years) to post college. I’ve basically moved the kid budget into a bigger travel and entertainment budget, but it’s a fair bit of dough each year.

 

[pb4uski]

Is it really just food and utilities though? We have two young kids....

I was thinking of an adult child living at home as our son did on and off from graduating high school until a few years ago.

They are long off the dole... own cars, insurance, cell phone plans, etc.

 

[jollystomper]

Our "required" expenses have gone down. Things that have been mentioned already - groceries, utilities, car and health insurance, cell phone plans, etc.

OTOH, we do give them better gifts and have helped them out in emergency situations since we are financially able to, as they get married, have kids, etc.. So our "discretionary" expenses for them has gone up. So for us, it is likely a wash, or perhaps we are spending more on them - but if so, it through our choice to have a "comfortable" FIRE spending level.

 

[SecondCor521]

Our umbrella insurance rates are higher with younger drivers living at home, even when they had their own cars registered in their names with their own car insurance policies. I called around about that but couldn't find a way to take them off our umbrella insurance if they were living at our house, so that was another $600 or so a year.

Gifts were our gifts to them. The amounts I listed were what we were spending when they were in high school / junior college. They had part-time jobs for spending money in college for things like concerts, dates, movies and Xbox games but didn't make enough to pay $2K for car insurance or $1K for a major car repair bill. And if we went out to eat or went to Hawaii or Europe for vacation, of course we covered their expenses.

Thanks, that makes sense. I haven't gotten my umbrella policy yet - I should - so I didn't know that they asked that kind of question.

I do some gifting to my kids, but my thinking there is somewhat mixed - some days I feel like I have way too much money and some days I'm still in the original mode of saving and being careful. Mostly I give them some on their birthdays and more at Christmas. I'm coming up on handing off the rest of their college funds as they graduate, so that will be a nice shot in the arm for them. And then I'm strongly considering disclaiming some of an inheritance, which will probably be in the next 5-10 years.

Cars are indeed really expensive. My ex and I have different opinions on this. She is in favor of subsidizing that expense so they can drive as teenagers. I, for whatever reason, chose not to subsidize that expense. I guess I wanted my kids to understand that expense early and not be shielded from it. Anyway, it seems to have worked out OK. All of my kids have a somewhat nicer than typical "high school" car/vehicle and are either paying for their own insurance (DS19) or have it paid for by their mom (DD18).

 

[pacergal]

When our kids moved out, our budget didn't change all that much. Utilities went down a bit. We will help off and on even now, if needed. And of course, once grandkids are in the picture, money seems to fly out of grandmas hands on books, clothes, etc!
Fun times and so enjoyable.:

 

[daylatedollarshort]

Thanks, that makes sense. I haven't gotten my umbrella policy yet - I should - so I didn't know that they asked that kind of question.

I do some gifting to my kids, but my thinking there is somewhat mixed - some days I feel like I have way too much money and some days I'm still in the original mode of saving and being careful. Mostly I give them some on their birthdays and more at Christmas. I'm coming up on handing off the rest of their college funds as they graduate, so that will be a nice shot in the arm for them. And then I'm strongly considering disclaiming some of an inheritance, which will probably be in the next 5-10 years.

Cars are indeed really expensive. My ex and I have different opinions on this. She is in favor of subsidizing that expense so they can drive as teenagers. I, for whatever reason, chose not to subsidize that expense. I guess I wanted my kids to understand that expense early and not be shielded from it. Anyway, it seems to have worked out OK. All of my kids have a somewhat nicer than typical "high school" car/vehicle and are either paying for their own insurance (DS19) or have it paid for by their mom (DD18).

I was pretty happy when our kids were able to drive and gladly paid to support that. Some of their friends got their licenses first and I paid one of the friends to drive our kids to school. No more car pools! That was great. They both went to community college initially which required driving from where we live, did volunteer work, were in sports, went out with friends often, and had part-time jobs. We were pretty happy to pay for car expenses so they could drive themselves around. It was a real time saver for us.

 

[dtbach]

"Getting two boys off our car insurance, cell phones, health insurance, and out of our refrigerator was a huge boost. Fixing their cars were no longer our problem."


I have 2 girls but same expenses. I figure on at least a 10% boost in the next year when most of this is gone.