5 Financial Decisions to Consider as Soon as Your Kids Move Out
Parents always get a bit melancholy when their kids grow up and move out on their own. Well, for about five minutes anyway.
Somewhere between getting your morning coffee with no pants on and making anything you want for dinner, it dawns on you that being an empty nester has its perks.
While you’re enjoying your abundance of me time, don’t forget to consider the money moves you can make now that your circumstances have changed.
Here are five ideas to get you started.
1. Rent Out Your Empty Rooms
Empty nesters often think about downsizing the family home to something smaller (and easier to clean!).
While that’s good advice, it may not be right for every situation. If your house is paid off or you’re in a rent-controlled home in an area with high rental prices, staying put might be a better bet.
Don’t let dust bunnies move into those empty bedrooms, though. Get some renters in there instead.
List your spare space on Trulia or Zillow for long-term rentals, or create an Airbnb listing to accommodate people for shorter stays. If you decide to rent rooms on a short-term basis, think about targeting business travelers to make even more money as an Airbnb host.
2. Review Your Ride
After children move out, it’s the perfect time to reevaluate your vehicular needs. If you’re no longer toting around piles of football gear or packs of kids for the neighborhood carpool, you probably don’t need a vehicle that could double as the Partridge Family tour bus.
Think about downsizing to a smaller, more economical vehicle, or even selling one vehicle if you’re a two-car family that can make do with just one.
If you decide to hang on to a second car, don’t let it simply languish in the driveway. Put it to work making you some extra money.
While you’re thinking about vehicles, remember to take a look at your car insurance policy. If you’re not using your car as much as you used to, it’s possible your rates may go down.
3. Reallocate Your Money
You don’t need me to tell you that kids are expensive. Food, clothing, allowances, school fees and other necessities can easily add up to hundreds of dollars per month per child.
A significant portion of your expenses went down when your kids moved out. Use that extra money to bulk up your retirement plan or pay down debt.
If you’re debt-free, talk to a financial planner about the best place to plunk down the money you used to spend on keeping your kids fed and clothed so it can grow. Don’t forget to also ask them how your new status as an empty nester affects your taxes, so you can plan accordingly.
4. Review Your Budget
Now that your household expenses have dropped, it’s time to re-evaluate your budget. You might not think it’s necessary, but a good budget is a critical part of making sure your financial success follows you into retirement.
Budgeting apps like Personal Capital and You Need a Budget take the pain out of planning and are a huge help in tracking how and where you spend your money.
One of the perks of setting up a budget and sticking to it is that it frees you to enjoy this new chapter of your life.
After the 11th sleepless night with your colicky baby, you probably thought a lot about all the fun things you’d do once Junior moved out on his own. Now that day has arrived, and with a proper budget in place, you can save for your dream vacation or kitchen remodeling project.
5. Ramp Up Your Hobby
When your schedule is packed with family responsibilities, it’s not easy to carve out time for a hobby. Now that you’ve got some breathing room, use it to earn money while pursuing your favorite pastimes.
If crafts are your thing, set up a shop on Etsy. Maybe you’ve been itching to up your photography game and sell a few prints along the way. Now’s your chance!
Indulging in a hobby can earn you some extra passive income, and if you’re feeling particularly frisky, you could even turn it into a business. Just make sure to factor the money you invest on it into your budget so you don’t overspend.
You don’t need a workroom and a hands-on hobby to see a financial gain. Volunteering with an organization that needs your help can be just as fulfilling. You won’t make much (or possibly any) money that way, but the expenses you incur while doing volunteer work are often tax deductible.
It’s common to feel a bit blue when your kids move out. Pat yourself on the back for the great job you did raising them, and enjoy your new journey as a part of the empty-nest community.
Your turn: How did your financial landscape change when the kids moved out?
Lisa McGreevy is a bargain-loving freelance writer based in Tampa. She’s a travel junkie who keeps her passport in her wallet because you never know when opportunity will strike.
