Making Financial Decisions

Having your children leave home, making you an ‘empty nester’, will cause changes in your life. It will probably be a sad occasion in many ways, but it will also provide opportunities.

To help you get started, let’s discuss the following questions:

•        What will be the impact on the family budget with the children gone?

•        Should I update my estate/retirement plans?

•        What sort of financial support might the children still need?

•        What sort of adjustments to my current and retirement portfolios should be made?

•        Should I consider selling or renovating the home?

•        Are there any tax implications of becoming an empty nester?

•        Will there be more time for other activities and what would be the cost?


The Children

Even though the children have left home, they might still have a strong emotional attachment to the place where they grew up. You may have decided that selling your home is the best strategy, but as a courtesy, it might be a good idea to include your children in the discussion, which should prevent any misunderstandings or hard feelings.

It has been an increasing trend in recent years that adult children return to the parental ‘nest’ for reasons such as difficulty in finding and becoming established in a career, debt, or relationship breakdown. Most parents will be quite willing to take their children back into the home (at least for the short term) and this possibility should be factored in when considering selling your house and moving to another locale or to smaller accommodations.

Your Home

An important consideration when the children have left is whether you are going to change your residential arrangements.

We are all familiar with the term ‘empty nesters’ and you may be thinking that the ‘nest’ is too large for one or two of you. Various options are available, such as ‘downsizing’, selling and renting, buying a vacation home, or renovating. Some of the factors to be considered are:


Selling and Moving

If becoming an ‘empty nester’ coincides with retirement, you might be considering selling your home and moving to a different community; this has become a popular option for many people. It can be a very financially attractive option, particularly for city dwellers to take advantage of generally higher real estate prices in urban areas and purchase a new home in a smaller community where home prices are often much lower. This allows you to find a nice home and still retain a fair amount of equity as savings; however, this needs to be carefully considered. Taking advantage of the “country life” often appears very attractive in theory, but small-town living can provide a substantial culture shock, as the services and other features that a large community provides might be sorely missed. Consequently, you should be doing a fair amount of homework to determine if the new location will provide the desired lifestyle.


As an empty nester, you might have plans to renovate your home, to make it more comfortable for one or two people. Before you renovate, it is important to keep in mind the possibility of children returning home. You may also want to consider adequate living arrangements for family and friends who come and visit.


Discuss how downsizing, moving, selling, or renovations fit into your long-term financial goals