Real Money Advice for Divorce

A three stage money guide to help you negotiate the divorce process and create a secure financial future for yourself and your kids.

30 Day Challenge

How to turn your life around in 30 days and save  $30 000 in the process.

A breakthrough in money management!

Real Money Advice for Families

Move your finances from red to black in four simple steps and secure your family's financial future.

Real Money Advice for Kids

A guide designed to help parents  teach their kids  the skills to become successful, confident and financially responsible.

Free Financial Advice e-book: Real Money Advice for Life
Professional directory and links for educational websites providing help with Money Management
Budget Spreadsheets and money worksheets
Tell us what you want to read in our next money management personal finance books

Downsizing after the kids have grown up and left

Wilson Luna

Two of the biggest changes in your life have to do with children. The first is when you have a new child in your home and the second is when that child grows up and moves out to start their own life. The first change can be a significant financial hit, but the second change can actually result in you saving a lot of money when you know how to downsize your expenses properly with the departure of a grown child.

Look at your finances

Once your children move out, you will need to look at your expenses thoroughly. Assess your income and make a list of all the expenses that you had to pay while your children lived at home. Then, cut out all the expenses that were primarily for your children including back to school items, new clothes and entertainment items. Once you have taken out the expenses that are strictly for your children, look at other expenses like food, gas and pay TV and cut out the amount your children accounted for. At this point, you will see just how much money you are saving with your children out of the house.

Start saving

Now that you have this extra money, don’t start spending it. You can start saving it. You never know when you will need this money. You can save for retirement of course but just because your kids are out of the house, it doesn’t mean they are not going to need money from time to time. In that case, you will have money saved up to help them.

Generally what you will do is take the amount you paid for expenses before your children moved out and subtract how much you are paying for expenses now. That will give you the amount of money you are now saving every month and that is the amount you put in the bank.

Start selling

If you have kids who have left home, then generally most of their furniture will not be needed anymore. Obviously you keep any items that are special to them, but beds, chairs and desks can all be sold to bring more money into your home. Talk to your children before you sell anything so you don’t sell something with sentimental value. Once you start going through their rooms finding what to sell, you may find that you have plenty of items to sell as well. That can lead to a good influx of money for the household, which can go straight into savings.

Adjust your grocery bill

One of the biggest mistakes that parents make when their children move out, is that they keep buying the same amount of food as they did before. If you do this you will only waste food and money. It is understandable why this happens. People get into a pattern of spending $700 a month on groceries for a decade and they continue that pattern.

Take some receipts from when your children lived at home and cross off the items they primarily ate, but which you and your partner did not. Once you have crossed off the items, you can make a grocery list of what is left. Again, you will buy less because teenagers at home can eat as much as both parents combined. Instead of three jugs of milk, you can buy one. Adjusting your grocery bill for just the two of you can save you hundreds of dollars per month. Surprisingly, it takes many couples months to start adjusting their grocery bill and usually it is only after they realise how much food they are wasting each month.

If you liked this article you might also be interested in these other articles about retirement, financial planning and superannuation:

What to do if your empty nest won't stay empty

The smart Aussie's guide to retirement planning

Want more? Take a look at the rest of our retirement,  financial planning and superannuation articles.

Share your thoughts, ideas and tips with the rest of the YFYM community .. visit our live forum to have your say!

Make sure you get the latest money management advice - bookmark YFYM today!

Author's Biography

 

Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.

Go back to the list