Empty Nest budget changes?

[Jimonlimon]

Basic question is how did your budget change from kids at home fully dependant to kids out of school with jobs living on their own?

We have two kids off at college and I want to retire before they graduate. I don't really know how to budget for post-graduation. It's easy to quantify tuition and housing expenses- other things like food, utilities, general living expenses sort of disappear into our overall household expenditures.

Did you carefully track and segregate these expenses or just wake up one day realizing that the grocery bill went down?

My assumption is that other than travel, our household expenses won't go up when we're true "empty nesters".

 

[RetiredAt49]

Depends largely on how independent your adult children are and if you plan to help them on occasion… like when they call and say they are broke (speaking from experience)…

 

[Jimonlimon]

Depends largely on how independent your adult children are and if you plan to help them on occasion……

I was budgeting a lump sum each that could go for grad school, home down payment, and/or college fund for future grandchildren but nothing for regular assistance. Then I started thinking about all the underemployed 20 somethings I know of. Both of my kids are studying for fairly high demand professions but you never know.

I'm quite confident of the income side of retirement- it's the expense side that is more uncertain.

 

[RetiredAt49]

Just saying… we thought our kids were well on their way to becoming financially productive humans but we’re running about a 50% success rate… my parents never gave me a dime nor did I expect it… think kids today are very entitled and thus the dilemma

 

[JDARNELL]

We added about 30 percent of their first year rent after graduation to assist with a nicer place to live even though they had full time entry jobs. More for our piece of mind keeping then our of some rough areas. This was short lived as they got raises and promotions.

 

[old medic]

HUGE CHANGE..... Biggest change was once they came off the DW health insurance and got their own cars and auto insurance. Food and energy cost also decreased. Up to that point we pretty much lived paycheck to paycheck with little savings.

 

[NW-Bound]

Our expenses are now 55-60% compared to the years pre-retirement and having two college-aged children.

However, not all expense reductions are due to them flying the coop. I would say without some other non-related reductions, our expenses would be 75%.

 

[Carol1862]

Very interesting question. Although there is a definite reduction for the obvious, before you turn around they’re getting married, having your grandchildren and all of a sudden your expenses are up again!

 

[The Cosmic Avenger]

I don't take into account the changes in grocery and phone bills, because in the big picture they won't be that significant (we only have one college-age child), and we might decide to help pay for something else. And one retirement planner I use allows for expenses only for a certain number of years.

 

[jollystomper]

Some cateogries went down, some went up.

Down: Food, insurance, medical, cell phone, utilities
Up: Gifts (graduation, marriage, "first home/apartment" support, grandkids, etc.)

Overall, we probably spend more, but then we have a lot more and we can decide in a given situation what to provide.

 

[pacergal]

Very interesting question. Although there is a definite reduction for the obvious, before you turn around they’re getting married, having your grandchildren and all of a sudden your expenses are up again!

Some cateogries went down, some went up.

Down: Food, insurance, medical, cell phone, utilities
Up: Gifts (graduation, marriage, "first home/apartment" support, grandkids, etc.)

Overall, we probably spend more, but then we have a lot more and we can decide in a given situation what to provide.

++
Both of our kids did a "boomerang thing" for a short time in the past.
Now both doing well, and the grand babies are so fun to spend time and money on!

 

[PatrickA5]

Our youngest of 3 (DS) finally was off the payroll after graduating college and getting his first "real" job last Summer. So, no more college, cell phone, insurance, rent, etc. That's a good $30K less per year. At one point, we had 3 kids in college (ugh).

We have since gifted money to all 3 kids, but that will be rare going forward. Total spending on kids (and spouses) for 2022 was less than $2K (not counting gifts).

Next year will be the first year that DW and I will be basically spending like we're retired. I expect total 2023 expenditures to be 60%-70% of the last 5-year average.

We do have 3 grandkids to spend on, but they're still young and don't cost that much (yet).

 

[Teacher Terry]

All 3 of mine boomeranged home a few times but the expense was mostly feeding them as they moved in with us. Only one is married and I contributed a set amount for the wedding. I think deciding in advance about big ticket contributions is important.

 

[Gallaher]

All expenses dropped as kids moved out. We were always willing to help out including paying for college/grad school even discounted rent in our second home (condo). One child has autism and fetal alcohol syndrome (adopted son) and we do help him but he has SSDI and lives in a group home so our expenses there are really low and predictable.
Our daughter-in-law has always trash talked us behind our back. Kind of a product of her own childhood with an alcoholic unemployed father. Clearly she must think word does not get around.
MY KIDS ARE NOT SAVERS. You will never find them on this forum.
I had planned on giving my kids $100K each for house down payments. Even the trash talking DIL.
This caused me some stress, I had the assets but did not know how to optimally execute the gifts. Finally my wife liberated me.
She asked “why?” ‘Why give them anything?’ ‘You gave them a good home, experiences and opportunities.’ ‘You earned it, we saved it, they will just blow it.
Yes our bills dropped a lot as kids left home. We have the added benefit of offering, or not, discretionary gifts. It really is liberating to realize realize you really owe your adult kids nothing.
Final note: EVERY TIME we get together they let dad pick up the bill for them and any tag along they invite. Venting over....for now

 

[punkinhead]

For us it was very easy to estimate since nearly everything we spent on them in their college years was filtered through a 529B. We're fortunate that they don't need ongoing financial support.

EDIT: I forgot about car and health insurance. Those didn't go through the 529B but are easy to estimate.

 

[rodi]

I retired when the kids were in middle school (I was an older mom). There was a noticeable drop in groceries when they went off to college... They're in college now and the funds we provide them come from the 529's.. (Rather than our general budget). That said - we're still paying car insurance, health insurance for one, and are generous with gifts in the form of cash for birthday and Christmas. They both have part time jobs, and one even gets health insurance through his union job as a grocery store checker.

Ironically, our spending has gone up since they went to college because we have more time to travel. More freedom to do date nights on the spur of the moment.

I'm not counting on any budgetary savings when they are launched since kids can boomerang... Any extra money that happens will go towards our fun-fund.

 

[racy]

For us virtually no change in overall annual expenses. I retired the year when both the mortgage and kids' college expenses were met. So those dropped off and were replaced by better vacations and health expenses (no more company insurance & pre-medicare).

 

[TripleLindy]

If there was a change, it wasn’t significant. We had a prepaid tuition plan for our kids, so college expenses were not overwhelming. I retired the year our youngest graduated from college, but he lived at home for a couple of more years while building his savings. Our middle child did the same. We’ve helped 2 of the 3 to get into their first homes and have pledged to do the same with our youngest, plus paid for a wedding, so if I factor those expenses in, I suppose our budget has been higher during the first 5 years of retirement. Hopefully, that level of spending is just about over, but of course, now there are grandkids to consider……

 

[Trailwalker]

It hasn't really changed for us. We're still contributing about $1000/month for adult disabled child's ABLE account so that he can live in decent housing. Long waiting list for power wheelchair accessible section 8 housing.

 

[Jackson D]

Empty nest budget changes

I have kept accurate records of our spending for many years and found this an interesting question. I looked at our actual spending the ten years before and ten years after we became empty nesters. We put three kids through expensive colleges during the ten years before becoming empty nesters and I retired as soon as the last kid graduated. My expenses don't account for inflation. Here are a few results of changes in annual expenses for the ten years before and after:
Clothing $5,000 $2,500
Education $46,000 $0
Groceries $11,000 $9,000
Gifts $4,000 $20,000
Insurance $9,000 $5,000
Travel $18,000 $34,000
Utilities no change

Overall spending could have dropped a lot but ours only dropped around 10%. Our (admittedly ridiculous) spending stayed close to the same because any savings was converted into big increases in discretionary spending on gifts, travel, etc. We immediately went into the go-go years of retirement once the kids were off the payroll and also tried to help them as they get on their feet in their early careers and start families of their own.

I guess my answer to your question is that some expenses drop but it is easy and fun to just start spending on other stuff if you are able.

 

[Koolau]

Some cateogries went down, some went up.

Down: Food, insurance, medical, cell phone, utilities
Up: Gifts (graduation, marriage, "first home/apartment" support, grandkids, etc.)

Overall, we probably spend more, but then we have a lot more and we can decide in a given situation what to provide.

This pretty well describes us as well.

Big change after kids were out of the house was that we realized our dream of moving to the Islands. THAT is a budget buster in comparison to living in the midwest - kids or no kids. We never tracked it - just made certain we didn't over spend.

 

[disneysteve]

We are not currently empty nesters, but I can tell you that during the 4 years DD was in college (on campus), our household expenses were noticeably lower. Gas, electric, water, groceries, household stuff like tissues, toilet paper, soap, laundry supplies, etc. were all lower during the school year and bounced back to normal when she came home for the summers. I would assume that if/when she moves out, the same will be true again.

 

[Surewhitey]

We realized that a year after getting married, she was fine for us to do some crazy things that definitely moved the needle for us financially. The last thing we did for her was financing her first house and they paid back in full, never missing a beat.

DW got a request to move from managing Dallas to managing LA offices a year after. We didn't really have a huge desire, but after sweetening the pot...a lot, we decided on a 4 year adventure there & never regretted it.

Expenses went down a lot after she left us, but the freedom made us more flexible to turbo boost the retirement plan. Then allowing us to take a few years sabbatical in Mexico.

So savings is just a small portion of the value of her flying the coop. Now we're working on the grandkids for the next 12 - 18 years...

 

[badatmath]

I made the mistake of asking for an advance on my allowance when I was quite young and was told to learn to budget. Thus I never asked for another dime when I left and it was not offered so there was no ongoing expense directed towards me.

 

[Koolau]

I made the mistake of asking for an advance on my allowance when I was quite young and was told to learn to budget. Thus I never asked for another dime when I left and it was not offered so there was no ongoing expense directed towards me.

Hopefully, someone providing the allowance helped you learn how to budget. We tried to help our kids with this. But setting limits on allowance was only one piece of the learning.

Oddly, DW and I have never truly budgeted. It has come "naturally" to know about how much we have at any given time, how much goes out and how much is left. We then can spend accordingly. For a kid, it's not so easy to picture and some kids need more help than others. Our kids ran the gamut of spendthrift to thrifty. YMMV