Financial Advice

Four Tips for Adapting to an Empty Nest

In these uncertain times, we have witnessed many changes in the stock market. How you react to these changes can reveal the type of investor you are, and the amount of risk you are willing to tolerate in your investments.

Published Jul 3, 2020 | Updated Apr 20, 2024
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As a parent, you likely have devoted the better part of two decades or more to prioritizing the needs of your children. After all, you bear the responsibility for their housing, clothing, food, education, health and well-being. Now, as an empty nester, your focus can be on you! Here are some financial considerations as your household shrinks.

Adjust Your Budget

News flash: Raising kids is expensive. The University of Texas LBJ School of Public Affairs estimates that in Texas, the average annual cost to raise a child is more than $11,000. Multiply that by 19 years, the median age kids leave home, and you’ve tallied $209,000.

With the kids out of the house, you are about to get a raise! Those weekly trips to the grocery store will become less frequent and less costly. Instead of doing several loads of laundry daily, you might find that laundry day comes around only once week or so. That’s a lot of water and electricity saved. The same goes for gas, car repairs, car insurance, medications, clothes, and so on.

At the same time, you can save by downsizing services in some areas. For instance, you may no longer need the fastest available internet service or phone plans with high data usage. Those streaming services or premium movie channels the kids insisted on may not be that important to you. Changing your family gym membership to one for individuals or couples could bring big savings over a year.

Identify places to downsize, and track your expenses for the first few months of empty nesting. Then create a realistic budget that supports the smaller household.

Pay Off Debt

Use the savings you’ve uncovered to pay off debt like credit card balances and even your home mortgage. Today a whopping 40% of households with someone at least age 70 were still paying off a mortgage. Retiring debt-free means your retirement savings and income can stretch further. A mortgage expert can provide an updated amortization schedule to help you project how much is needed to pay off your mortgage before retiring.

Look for low-rate, no-fee credit cards, and pay off any balances monthly. And, now that the kids are gone, you can use those travel rewards to pay for the romantic getaways you have postponed.

Plan for Retirement

If your kids’ needs took priority over putting money in retirement savings, don’t feel alone. A recent survey found that about half of parents with children over 18 say they’ve done just that.

But with those financial demands gone, now is a great time to start catching up. Consider earmarking regular, stepped up deposits into your retirement accounts. Talk to a financial planner* for advice on the best plan options for your situation and the amounts you are allowed to contribute annually to each type.

Also take a look at your emergency savings accounts. Over time, it may have dwindled as you needed to cover the kids’ unexpected band trip expenses or repairs to the roof. With fewer monthly expenses in the empty nest, you can rebuild an emergency cushion.

Reevaluate Your Accounts

You might consider doing some estate planning. Not only does this preparation provide for your family, it is also known to reduce stress on the loved ones you leave behind during what will certainly be a difficult time for them. You’ll want to review your insurance policies for more savings or to be sure you have the right coverage, including health insurance, auto insurance, and property insurance. You also can choose to protect your estate with life insurance and/or estate protection riders. You may no longer need as much life insurance as you did while your kids were financially dependent on you. In addition, they may now be eligible for their own employer’s health insurance, even though they can remain on your policy until age 26. They also could get their own auto insurance policies and reduce your premiums, or stay on your policy but reimburse you for their portion. Consult our Financial Experts

Adjusting to empty nesting isn’t just about having more space in the house and more time for you. It’s also an opportunity to adjust your finances.

Consult our Financial Experts

Contact the CFS* Investment team at UFCU to learn more about planning for your future.


* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. UFCU has contracted with CFS to make non-deposit investment products and services available to credit union members.