As parents, you’ve probably spent the last 18 or so years prioritizing spending money on your children, their activities and their needs. When they finally leave the nest, your entire financial picture can change. Now instead of paying for dance lessons or club sports, you will likely shift your spending to different aspects of your life. Discover four financial considerations you may want to evaluate as you financially adjust to life as empty nesters.

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Have a family conversation

Nicole Watson is senior vice president, territory director of retail banking, for UMB Bank.

When your child leaves the house for college or for their first professional job after graduating high school and you adjust to life as empty nesters, you should have a family conversation about finances. Before you sit your child down for the talk, you should decide if you want to still financially support them and what that looks like for your family. Do you want to fully pay for their expenses, help out within a budget or are you not planning to offer money at all? Once you decide, you can have a productive conversation. You may also want to share some of the things you learned about managing finances when you were their age. If your child is interested, share the new UMB Financial Education Center with them and encourage them to explore some of the modules.

Build a new budget

After your family conversation, start by reviewing where your expenses have changed. Your grocery bill and utilities might decrease since fewer people will be in the home raiding the fridge and using water and electricity. You might also need to shift some money to send to your college student or young professional every month if you are helping them cover their school or work expenses. By reviewing where you can allocate your funds now, you can set some new financial goals like adding more to retirement savings, taking a long vacation or paying down debt. 

Use investment accounts

If you are helping your child pay for college and the expenses that go along with it, you can still put money in a 529 account once their semester has started. This allows you to get a tax break, or you might want to consider refocusing on your own retirement savings. This period when the children leave the nest can be peak earnings for parents, assuming you have a consistent career path and opportunities for advancement. A financial advisor can help talk to you about how much of your new liquid funds should be allocated to your retirement accounts and set you on the right path for financial freedom.

Tackle debt

If you have funds freeing up, evaluate if you have debt that you can pay down. You can work with your financial advisor to establish financial goals and determine what debt you should pay down first. Now might be a good time to also start a new savings strategy if you plan to make a large purchase, such as a new house, second home or vehicle so that you can avoid new debt in the future.

The transition from having a full house to an empty nest can be financially liberating. Take advantage of the new opportunities in your budget to reach your financial goals that might have been put on the backburner while you raised your family.


Nicole Watson is senior vice president, territory director of retail banking, for UMB Bank.