How did your spending change when your kids left the house?

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FI4LIFE
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How did your spending change when your kids left the house?

Post by FI4LIFE »

I have always had a hard time planning for my retirement "number" because I base all of my spending projections on current numbers, which are influenced by the fact that we have three kids in the house. I'm looking for anecdotes from those who have graduated from that phase and are currently living in an empty nest.

How drastically (or not) has your spending changed?
new2bogle
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Re: How did your spending change when your kids left the house?

Post by new2bogle »

+1

would love to hear about this too as I'm in the same situation.
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Re: How did your spending change when your kids left the house?

Post by bgatze »

+1 as well

I have young kids and want to see the advice given here as I set my long term goals.
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btenny
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Re: How did your spending change when your kids left the house?

Post by btenny »

I downsized and got a much smaller house and less land and no pool. So I got lower home cost and lower taxes and lower utility bills etc.. In my case I saved 50% on housing costs. The extra money allowed me to retire early. I paid for their college so I did not save money on living expenses until they graduated. Then they got older and graduated and moved on to other cities far away. So now I no longer can see them regularly except via Facetime. So that is bad. There are trade offs.

Good Luck.
Last edited by btenny on Mon Apr 13, 2020 11:43 am, edited 1 time in total.
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Sandtrap
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Re: How did your spending change when your kids left the house?

Post by Sandtrap »

After all the quiet internal celebrating and "whooping it up" and shouts of glee!!!!!!

Spending increases:

Failure to thrive
Failure to launch
Boomerang startups
Relocation after numerous job changes and location changes
Safety net failures
Retraining, re-education for career changes
Grandchildren (baby supplies), etc. . .
Etc, etc, etc, . . . .

Not sure why these things were a "non issue" in the 50's.
Cultural change?
Societal change?
who knows.

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Jack FFR1846
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Re: How did your spending change when your kids left the house?

Post by Jack FFR1846 »

I'm not there yet, but see it coming. DS#1 finishing his last college term and has a job lined up but plans to live at home. For my planning, I won't be paying $75k a year for college for him, we've let him know that he will pay rent while living here once getting a paycheck and he'll buy and insure his own car. So overall....I don't know....$100k a year saving?

DS#2 in community college, Freshman year. Won't be done for a while with potential plans to transfer over to a 4 year. No light at the end of his tunnel yet.

What kind of savings are you looking for? Lower car insurance cost with one less driver? Lower corresponding umbrella policy savings? Less food to buy?

I'd think you could excel current costs, costs before they leave and costs after. If you have small kids, then your costs might be near zero compared with paying for college. I consider a few grand for child care to be near zero.
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JDCarpenter
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Re: How did your spending change when your kids left the house?

Post by JDCarpenter »

FI4LIFE wrote: Mon Apr 13, 2020 11:17 am I have always had a hard time planning for my retirement "number" because I base all of my spending projections on current numbers, which are influenced by the fact that we have three kids in the house. I'm looking for anecdotes from those who have graduated from that phase and are currently living in an empty nest.

How drastically (or not) has your spending changed?
Our post-tax spending plummeted. But--they all three did private schools, followed by colleges that weren't among those at which they would have had full tuition scholarships. So our biggest post-tax spending amount was typically education. And three college bills in a single year rivaled our federal tax bill.

When the last one finished, we "realized" that we actually made a great income, just like the numbers should have indicated. :D

Of course, once we retired and started traveling in earnest, our spending basically went back to the historic highs.

A suggestion, based on what we did--as you get closer to retirement, analyze a stripped down "budget" (using retrospective annual spending) that removes all the direct kid (and work) expenses, along with the taxes related to your job. That will yield a baseline spending number to which you can add the anticipated spending that will arise from the absence of work. As you have found already, the spending when working, with kids under the roof/wallet, may bear little resemblance to retirement spending.
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JBTX
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Re: How did your spending change when your kids left the house?

Post by JBTX »

One justed started college (but not far away) and a teenager at home. Our situation is not common as there are special needs issues in both cases.

When our college child left spending went up quite dramatically. I was shocked when I ran the numbers. We just gave her too much discretion as she has no ability to control spending, plus we've changed housing situation a couple of times already just in the first year. Also, to add insult to injury, she has struggled with school and dropped out of some classes to the point that now ESA/529S cant be used. Luckily both DW and I are working and can fund it but it is definitely something we are working on getting under control.
bltn
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Re: How did your spending change when your kids left the house?

Post by bltn »

My two children didn't t finish their education until last year. My son finished his graduate school education last spring. For the first time in 15 years, we don t have to pay high education costs. But since I had the majority of the money put aside for their education, it didn t affect our living expenses. Now it s a good thing we re finished with their education because the last 529 is depleted. I recently retired and our spending has gone up a bit. Could possibly downsize our house, but this is our home. My wife wouldn't t like to move.
Each of the kids now live more than 1000 miles away, but their careers seem promising, which is what we want. I do hope they move closer eventually.
Last edited by bltn on Mon Apr 13, 2020 1:44 pm, edited 1 time in total.
cshell2
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Re: How did your spending change when your kids left the house?

Post by cshell2 »

JBTX wrote: Mon Apr 13, 2020 1:00 pm Also, to add insult to injury, she has struggled with school and dropped out of some classes to the point that now ESA/529S cant be used.
What does this mean? There are no rules about academic progress for using a 529 or ESA. Or do you just mean that the money is now all gone?
delamer
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Re: How did your spending change when your kids left the house?

Post by delamer »

If the kids are fully launched, you’re finished paying for college and extracurricular activities in K-12, but are staying in the same house then:

1. Health insurance costs go down since you’ll pay for self-plus-one instead of family. Other healthcare costs for kids (prescriptions, glasses/contacts, well visits, etc.) will disappear.

2. Food costs go down. If you had 2 kids, then assume roughly that costs will be cut in half. Same with cell phone bill, if you were paying.

3. Clothing costs go down. I tracked spending for kids separately from parents, so had a good handle on this.

4. If the kids had cars and you paid for/contributed to insurance gas, insurance, repairs, those will disappear.

5. Housing costs will not change appreciably (again, assuming you stay in the same house). Maybe small declines in electricity and water use will lead to slightly lower bills.

6. Other small costs like haircuts, cosmetics, etc. will disappear.

7. If you continue to take the same type of vacations, paying for 2 is cheaper than for a family.

If your kids are still young, it is going to be hard to figure out how much savings you’ll see when a young adult becomes independent because you don’t know how much they’ll “cost” as teenagers.
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augryphon
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Re: How did your spending change when your kids left the house?

Post by augryphon »

When he finally graduated, we had significant extra money for the first time in 25 years. We just funneled that to additional investing and were able to make meaningful contributions annually to our favorite charities. We don’t buy differently than before.
MathWizard
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Re: How did your spending change when your kids left the house?

Post by MathWizard »

College costs went down.

Food cost went down.

Lower water & heating bill from fewer showers.

Once college costs were gone, we paid off the house soon thereafter,
so indirectly, no debt.

Added: We gave him my wife's car (about 50K in it), traded off the vehicle he had been driving
and bought a newer car for my wife.

So some cost there, but as soon as he had a job, he was own insurance plan.

Health insurance: Once he was on the company's health insurance, so we dropped from family plan to
employee + spouse, for a $112/month savings.
Last edited by MathWizard on Mon Apr 13, 2020 2:19 pm, edited 1 time in total.
bloom2708
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Re: How did your spending change when your kids left the house?

Post by bloom2708 »

I think you can write down every expense today and label it one of 3 ways:

1. no change
2. partial/split
3. gone

Electric bill. That could drop a bit.
Water bill. Less people = less water used
Cell phone bill. 2 lines instead of 5?
Car insurance. 1 or 2 cars instead of 4-5?
Groceries. Eating for 2 instead of 4-5?
Dining out. More or less or the same?

The best thing to do is really track your spending well now. That way you understand what categories could potentially dip or increase.

What is hard to guess at is, will you downsize? Perhaps move for better weather? Upsize? Up-price?

I expect our college kids to migrate home each summer. College junior is living at home now due to C19. Not sure if/when she will head back to rental house. High school junior wants to go to college far away. We'll see if that holds.

I have a 3 row SUV. Will I need/want a 3 row big SUV when kids are flown? I plan to have a nice but "liability only" type car. I'll let my wife drive the "nice" car.

How that all translates to lower or higher bills is tough to guage.

I think working affects our bills more than kids.
Last edited by bloom2708 on Mon Apr 13, 2020 2:32 pm, edited 1 time in total.
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Re: How did your spending change when your kids left the house?

Post by TomatoTomahto »

We must have misread the memo. Our kids are mostly launched, but we bought a house and renovated it to cost roughly 2-3 times what our old house cost. When the kids were home, we didn’t need to bribe them to come visit. :D

I guess we spend less on tuition, clothing, entertainment and groceries. It seems to me everything else is an increase.
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Re: How did your spending change when your kids left the house?

Post by MarkerFM »

The five years before our first (of two, one year apart in school) started college, we spent about $25K/year on direct expenses for them. They went to public schools K-12.

This year, it will be about $2K, primarily travel costs to visit us, which we mostly pay. Direct costs only, we didn't measure incremental costs like insurance, food, meals out, etc.

The college years were a different story. Average of $100K/year for the six years at least one was in school. Both went to expensive private colleges with no aid.

Overall, the change in spending didn't move the needle much as we also upsized both houses and spent more in other areas as well.
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Re: How did your spending change when your kids left the house?

Post by GoldenFinch »

In three years, we will be done paying for any expenses we are contributing to for law school, grad school and college for our three oldest. (They all have good scholarships and contribute otherwise, but we still pay something for each.) That will mean a huge decrease in our spending. We still have one younger one, but we have a 529 fully funded so I don’t see any big expenditures outside of the 529 as this youngest kid has been our least expensive. I don’t know for sure, but I think our expenses will go way down in three years. Like, a lot! I expect the three oldest to be gainfully employed and self sufficient based on their degrees, but who knows. They are definitely on their own as we have given them every opportunity imaginable.
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Re: How did your spending change when your kids left the house?

Post by basspond »

Monthly spend, state college

children(2/1) - Transportation, college, living, medical = -$5.5k / -$3k

Travel +$0.5k
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BroIceCream
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Re: How did your spending change when your kids left the house?

Post by BroIceCream »

I agree with most other posts on various water/utilities/bills going down.

EATING OUT bill went up...4x (from once a month, to weekly, occasionally more).
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Re: How did your spending change when your kids left the house?

Post by obgraham »

It was a good 15 years after the last one left the house before we were no longer contributing to their support. And one of the three is still not past looking for the occasional handout.
In other words.....it never ends!
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Re: How did your spending change when your kids left the house?

Post by ram »

For many years 529 contributions or college costs exceeded 20% to 30% of post tax spending. These are now gone.
Food, car insurance costs are relatively trivial and I have not monitored them.
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Re: How did your spending change when your kids left the house?

Post by JBTX »

cshell2 wrote: Mon Apr 13, 2020 1:23 pm
JBTX wrote: Mon Apr 13, 2020 1:00 pm Also, to add insult to injury, she has struggled with school and dropped out of some classes to the point that now ESA/529S cant be used.
What does this mean? There are no rules about academic progress for using a 529 or ESA. Or do you just mean that the money is now all gone?
You must be at least half time to reimburse certain living expenses. I honestly don't know what that means if you start half time but end up less. Now she is less than half time. Most of the money is still there.

Worst case scenario I could probably set up a 529 able for my son and move some in there (but there are limits you can put in annually) and it may be tricky if he is an adult getting aide- that is a whole different issue.
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Re: How did your spending change when your kids left the house?

Post by MikeG62 »

FI4LIFE wrote: Mon Apr 13, 2020 11:17 am I have always had a hard time planning for my retirement "number" because I base all of my spending projections on current numbers, which are influenced by the fact that we have three kids in the house. I'm looking for anecdotes from those who have graduated from that phase and are currently living in an empty nest.

How drastically (or not) has your spending changed?
To some extent it depends on what you are paying for while they lived at home.

For example, we paid for pretty much everything for our two daughter’s while they lived home and before they graduated college and got “real jobs”. Things like:

1) Gas and insurance for the cars we bought for them to drive,
2) Hair and nail salon’s (if you have daughter’s you know how expensive these things are),
3) Cloths
4) Cell phones,
5) etc...

Once they were employed post college graduation, we stopped paying for the above (although my DW will continue to pick up cloths for them from time to time).

In addition to these things, we of course paid for all of the costs for our home, including food/groceries. While these costs have gone down, it’s more of a rounding error in the grand scheme of things.

So the big savings came from shifting their direct costs that we were paying for from us to them.
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Re: How did your spending change when your kids left the house?

Post by fourwheelcycle »

Sandtrap wrote: Mon Apr 13, 2020 11:43 am Spending increases:

Failure to thrive ...Failure to launch...Safety net failures...career changes...Grandchildren (baby supplies), etc. . .
Sandtrap is absolutely correct. I was going to comment that when kids leave you can subtract all of your budget items for college savings and expenses then add an amount for increased travel to enjoy your new freedom, but then I saw Sandtrap's post and realized we also have a huge net increase in expenses for these new items.

It started with a few ad hoc costs for living expense assistance for one of our children, then more expense to "even up" for our other child, then mortgage downpayment assistance for one chid and an "even up" expense for the other child, then grandchildren's 529 expenses, etc., etc. These are all not really expenses, rather they are what you do with your retirement savings when you realize you cannot take it with you, so why sit on it until the very end.
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Re: How did your spending change when your kids left the house?

Post by Sandtrap »

obgraham wrote: Mon Apr 13, 2020 7:15 pm It was a good 15 years after the last one left the house before we were no longer contributing to their support. And one of the three is still not past looking for the occasional handout.
In other words.....it never ends!
+1
Yes.
The gift that keeps on taking. . . .
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Jags4186
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Re: How did your spending change when your kids left the house?

Post by Jags4186 »

Sandtrap wrote: Mon Apr 13, 2020 11:43 am After all the quiet internal celebrating and "whooping it up" and shouts of glee!!!!!!

Spending increases:

Failure to thrive
Failure to launch
Boomerang startups
Relocation after numerous job changes and location changes
Safety net failures
Retraining, re-education for career changes
Grandchildren (baby supplies), etc. . .
Etc, etc, etc, . . . .

Not sure why these things were a "non issue" in the 50's.
Cultural change?
Societal change?
who knows.

j :happy
Have you considered what would happen if you weren't providing all of that "Economic Outpatient Care"? There are tons of young adults who "fail to thrive, fail to launch" that don't have parental benefactors chipping in and they all aren't living on the streets.
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Re: How did your spending change when your kids left the house?

Post by Jags4186 »

fourwheelcycle wrote: Tue Apr 14, 2020 8:00 am
Sandtrap wrote: Mon Apr 13, 2020 11:43 am Spending increases:

Failure to thrive ...Failure to launch...Safety net failures...career changes...Grandchildren (baby supplies), etc. . .
Sandtrap is absolutely correct. I was going to comment that when kids leave you can subtract all of your budget items for college savings and expenses then add an amount for increased travel to enjoy your new freedom, but then I saw Sandtrap's post and realized we also have a huge net increase in expenses for these new items.

It started with a few ad hoc costs for living expense assistance for one of our children, then more expense to "even up" for our other child, then mortgage downpayment assistance for one chid and an "even up" expense for the other child, then grandchildren's 529 expenses, etc., etc. These are all not really expenses, rather they are what you do with your retirement savings when you realize you cannot take it with you, so why sit on it until the very end.
Those are all optional expenses. Your kids could also wait for you to pass and inherit what's left.

I am extremely fortunate for what my parents provided me (great schools, no student loans), but once I graduated undergrad (in 4 years, no option otherwise with my mother) I think the most cash I've received from them is a $100 check on my birthday.
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Sandtrap
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Re: How did your spending change when your kids left the house?

Post by Sandtrap »

Jags4186 wrote: Tue Apr 14, 2020 8:44 am
Sandtrap wrote: Mon Apr 13, 2020 11:43 am After all the quiet internal celebrating and "whooping it up" and shouts of glee!!!!!!

Spending increases:

Failure to thrive
Failure to launch
Boomerang startups
Relocation after numerous job changes and location changes
Safety net failures
Retraining, re-education for career changes
Grandchildren (baby supplies), etc. . .
Etc, etc, etc, . . . .

Not sure why these things were a "non issue" in the 50's.
Cultural change?
Societal change?
who knows.

j :happy
Have you considered what would happen if you weren't providing all of that "Economic Outpatient Care"? There are tons of young adults who "fail to thrive, fail to launch" that don't have parental benefactors chipping in and they all aren't living on the streets.
Very true!!!!!

j :happy
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delamer
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Re: How did your spending change when your kids left the house?

Post by delamer »

Jags4186 wrote: Tue Apr 14, 2020 8:48 am
fourwheelcycle wrote: Tue Apr 14, 2020 8:00 am
Sandtrap wrote: Mon Apr 13, 2020 11:43 am Spending increases:

Failure to thrive ...Failure to launch...Safety net failures...career changes...Grandchildren (baby supplies), etc. . .
Sandtrap is absolutely correct. I was going to comment that when kids leave you can subtract all of your budget items for college savings and expenses then add an amount for increased travel to enjoy your new freedom, but then I saw Sandtrap's post and realized we also have a huge net increase in expenses for these new items.

It started with a few ad hoc costs for living expense assistance for one of our children, then more expense to "even up" for our other child, then mortgage downpayment assistance for one chid and an "even up" expense for the other child, then grandchildren's 529 expenses, etc., etc. These are all not really expenses, rather they are what you do with your retirement savings when you realize you cannot take it with you, so why sit on it until the very end.
Those are all optional expenses. Your kids could also wait for you to pass and inherit what's left.

I am extremely fortunate for what my parents provided me (great schools, no student loans), but once I graduated undergrad (in 4 years, no option otherwise with my mother) I think the most cash I've received from them is a $100 check on my birthday.
Different families, different family values.

The OP’s family will decide when the time comes how much help/gifts they want to provide for grown children. Just like they do, to a lesser extent, for dependent children. Some families would think that your parents paying for your college education was too much help.
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Re: How did your spending change when your kids left the house?

Post by Jags4186 »

delamer wrote: Tue Apr 14, 2020 10:01 am Different families, different family values.

The OP’s family will decide when the time comes how much help/gifts they want to provide for grown children. Just like they do, to a lesser extent, for dependent children. Some families would think that your parents paying for your college education was too much help.
Agreed to the bolded statement. I am legit curious (and I am not judging) what "family value" drives you to give your adult children substantial financial assistance? I can tell you my parents' view was to get me and my sister into adulthood without encumbrances. I guess that was their view of "family values".
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Re: How did your spending change when your kids left the house?

Post by delamer »

Jags4186 wrote: Tue Apr 14, 2020 10:22 am
delamer wrote: Tue Apr 14, 2020 10:01 am Different families, different family values.

The OP’s family will decide when the time comes how much help/gifts they want to provide for grown children. Just like they do, to a lesser extent, for dependent children. Some families would think that your parents paying for your college education was too much help.
Agreed to the bolded statement. I am legit curious (and I am not judging) what "family value" drives you to give your adult children substantial financial assistance? I can tell you my parents' view was to get me and my sister into adulthood without encumbrances. I guess that was their view of "family values".
We’ve never given anything to our adult children that would imperil our own financial security. Parents who do that — in non-emergency situations — are creating more problems than they are solving.

And, of course, what’s a substantial amount for one family might be a modest amount for another.

I inherited a large amount from my parents after I retired. We decided that we’d rather our kids benefit from our assets when they are youngish and it can make a material difference. Help with a house downpayment at 30 is more valuable than receiving the same amount when your 60. And not buying them a house, just making it a bit easier to afford one on their own. Again, all within the context of not giving them anything that would hurt our finances.

(Of course you’re judging. :wink: We all do.)
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Re: How did your spending change when your kids left the house?

Post by Jags4186 »

delamer wrote: Tue Apr 14, 2020 10:41 am
Jags4186 wrote: Tue Apr 14, 2020 10:22 am
delamer wrote: Tue Apr 14, 2020 10:01 am Different families, different family values.

The OP’s family will decide when the time comes how much help/gifts they want to provide for grown children. Just like they do, to a lesser extent, for dependent children. Some families would think that your parents paying for your college education was too much help.
Agreed to the bolded statement. I am legit curious (and I am not judging) what "family value" drives you to give your adult children substantial financial assistance? I can tell you my parents' view was to get me and my sister into adulthood without encumbrances. I guess that was their view of "family values".
We’ve never given anything to our adult children that would imperil our own financial security. Parents who do that — in non-emergency situations — are creating more problems than they are solving.

And, of course, what’s a substantial amount for one family might be a modest amount for another.

I inherited a large amount from my parents after I retired. We decided that we’d rather our kids benefit from our assets when they are youngish and it can make a material difference. Help with a house downpayment at 30 is more valuable than receiving the same amount when your 60. And not buying them a house, just making it a bit easier to afford one on their own. Again, all within the context of not giving them anything that would hurt our finances.

(Of course you’re judging. :wink: We all do.)
No, I'm not judging. I'm jealous. There's a big difference :greedy
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Re: How did your spending change when your kids left the house?

Post by fourwheelcycle »

Jags4186 wrote: Tue Apr 14, 2020 8:48 am I am extremely fortunate for what my parents provided me (great schools, no student loans), but once I graduated ... the most cash I've received from them is a $100 check on my birthday.
Yes, that is about how much my wife and I received from our parents. However, our parents came of age during the 1930's and were conditioned (for good reason) to be very careful with their modest savings.
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Re: How did your spending change when your kids left the house?

Post by CyclingDuo »

FI4LIFE wrote: Mon Apr 13, 2020 11:17 amI have always had a hard time planning for my retirement "number" because I base all of my spending projections on current numbers, which are influenced by the fact that we have three kids in the house. I'm looking for anecdotes from those who have graduated from that phase and are currently living in an empty nest.

How drastically (or not) has your spending changed?
In our opinion and experience, it is tough to figure out total spend as a family compared to when you are in the empty nest years. At least it was for us because it so variable and fluid depending on the activities the kids participated in, cars, insurance, clothing, health, etc... not to mention rising salaries for both of us as a dual income earning couple.

The picture became clearer, and clearer as the years went on and became very clear as the nest emptied and funding college education years were finished. Maybe there are some families who are better accountants with less variable expenses who had no troubles with having a clearer picture early on, but that was not our case. One of our children was a football/baseball player/weight lifter and I can't count how many times I would go to the cabinet or fridge and say "What happened to the jar of peanut butter, or the jam, or the jug of milk, or loaf of bread, or insert your food item here: ____________"? That one kid ate more than my wife and I on a daily basis, so feeding him alone was like feeding three kids! And he was that way since birth and still is. :shock:

So what happened to us in terms of anecdotes that may or may not be able to help you in your planning.

Spending dropped precipitously in our household for food, transportation, utilities, entertainment, clothing, etc... . There was an adjustment period of figuring it all out as the college education years progressed and completed where we still had some cash flow going to fund their educations. We were able to implement even more spending cuts as we settled into what we really did or didn't need as a couple in terms of our lifestyle as a couple compared to our lifestyle as a family, or how we were living with the daily grind with a full house.

What happened to our spending was it once again allowed us to implement the starve and stack method (live on one salary and save the other). This coincided for us during the IRS allowed catch up years where we could contribute more to pre-tax retirement plans as well as Roth IRA's. This is now our 5th year of doing that (ages 58/62 respectively). We did the starve and stack method for 5-7 years before we had children as well back in the late 80's and early 90's. No way we had enough income to do the starve and stack while raising a family on our salaries (performing arts/education/academia), so for that period of time we simply saved 15-20% of our income into retirement accounts along the way, and saved for our children's college educations as well.

Examples of starve and stack articles....

https://grow.acorns.com/how-the-starve- ... ls-faster/
https://www.businessinsider.com/how-to- ... kly-2017-7

I now track our expenses and break it all down into the average daily spend. I do the same for our savings by breaking it down into daily savings x 365 (366 this year). We have less variables in our expenses now than when we had children who were in all kinds of sports, music, summer camps, international travel, moves across the country, etc... .

As mentioned above, in those years with our kids at home we saved 15-20% of our income for retirement. That averaged out to never having been more than $45-$75 per day (outside of a few years where I had some high paying contracts). It was usually lower than that as our combined salaries were under $100K as a household for many years. We are a dual income household and our combined incomes were under $100K from 1985 - 2010 for a total of 26 IRS years. This is only our 10th year of having a combined household income over $100K and we are in our final years of working. We both just got additional raises going forward (we were informed of this during this shut down and work from home period of time), so we feel fortunate about that. Regardless, addressing your request for anecdotes, we are now able to starve and stack as empty nesters. We could not have done that with children at home based on our salaries and expenses at the time.

The past few Empty Nest Years and what that has allowed us to do...

2016 saved $206 per day
2017 saved $206 per day
2018 saved $273 per day (anomaly year including being laid off)
2019 saved $183 per day
2020 saving $159 per day (lost $$$$ gigs for live performances with orchestras - Covid19)

We will most likely stay on that starve and stack path for at least the next 3 - 4 years, then pull back as my spouse retires and starts receiving her pension.

The first graphic below shows the average daily spend by age demographic. We are members of the Young Baby Boomers demographic and with a mortgage, our daily spend was very comparable to our age demographic that is depicted in that graphic of being $178.01 once we became empty nesters. Our daily spend actually averaged about $182-183 with a mortgage after some cuts in our lifestyle (fancy wine clubs, eating out, lunches at work, subscriptions, racing bikes, plenty of needs vs. wants conversations between the two of us, etc...).

Image

Our savings goal over the past few years has been akin to the KlangFool method of saving. KlangFool's strategy is to try and save the amount of annual expenses per year, each and every year, as you build your multiple of savings to cover expenses in retirement (be that 25X or 30X or whatever multiple one is focusing on reaching for retirement). Our daily saving listed above sort of matched what our daily spend was outside of the anomaly year of 2018 as we played catch up years thanks to the empty nest allowing us to do that.

How does that align with our upcoming retirement years?

This FIRE goal graphic below shows the daily spend amounts and subsequent portfolio amounts needed to provide a level of spend based on the Trinity Study of 4% SWR. As mentioned above, we were somewhat clueless what that number would even look like in retirement when we had kids at home and we were in our 30's, 40's, and even early 50's. Now, at age 58/62 respectively, we have a much clearer picture of our needs, wants, and variables as a couple and what we currently require on an annual basis to meet those expenses as empty nesters. This helps us use our final years of accumulation as empty nesters utilizing the income we make from our human capital to fine tune retirement goals and expectations of daily spend. In our case, we will also have a pension and two SS checks to calculate a variety of scenarios for covering our expenses in retirement. What those two legs of retirement income will not provide will come from the third leg - our risk portfolio.

None of that was clear for us in our 30's, 40's, etc... while raising children as the pension amount builds over the years, the SS benefit grows over the years, salaries grow over the years, rate of savings changes over the years, and the risk portfolio does what it does over the years.

Image

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
RadAudit
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Re: How did your spending change when your kids left the house?

Post by RadAudit »

Sandtrap wrote: Tue Apr 14, 2020 8:39 am
obgraham wrote: Mon Apr 13, 2020 7:15 pm It was a good 15 years after the last one left the house before we were no longer contributing to their support. And one of the three is still not past looking for the occasional handout.
In other words.....it never ends!
+1
Yes.
The gift that keeps on taking. . . .
Phoo! I was hoping there was a chance that it would level off at some point in time.

I'm coming to believe that you'll spend at least as much in post-retirement as you do in pre-retirement.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
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FI4LIFE
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Re: How did your spending change when your kids left the house?

Post by FI4LIFE »

Thanks to everyone so far for the detailed responses and personal anecdotes. I have done a poor job of tracking spending but have done some guess work on our FIRE number by taking our current salaries and subtracting all costs that will no longer exist once we are no longer working or supporting children such as retirement savings, college savings, daycare, mortgage, a % of transportation etc. I figure that what's leftover equals our approximate annual spending (for two) before taxes.

I haven't bothered trying to figure out how much less we will spend on things like food, clothes and vacations with three less people in the home, figuring this gives us a buffer. Some day I will create a budget and track expenses.

In regards to supporting adult children, I don't plan on allowing this. I've seen friends and co-workers fall into this trap and can appreciate the circumstances that led to these situations but don't believe this is something we will support ourselves. Time will tell.
Last edited by FI4LIFE on Wed Apr 15, 2020 4:33 am, edited 1 time in total.
Broken Man 1999
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Re: How did your spending change when your kids left the house?

Post by Broken Man 1999 »

We have had no issues with DDs returning home except for one DD and family living with us while waiting for their new home to be built. They had sold their old home much quicker than expected, so they moved in with us for about six months. That allowed them to save renting for a short time

Actually it was fun having them, everyone got along. I was kinda sorry when they left. They helped out around the house with cooking and such. Family meals were great. Enjoyed the grandkids immensely.

Once launched, the DDs haven't needed help financially at all. They were employed in good jobs very quickly after graduating from college.

We certainly would have helped if they had legitimate needs, but they never have needed help.

The DDs have told us when the granddaughters are teenagers they will live with us. The old mother-daughter conflicts! I'm OK with that. :D

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
Lookingforanswers
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Re: How did your spending change when your kids left the house?

Post by Lookingforanswers »

Some good responses above which point out:
- lots of savings in living expenses and education expenses
+ potentially offset, at least partly, by any additional money you have decided to gift or lend your children when they are young adults.

I will mention a couple more spending needs to budget for that I didn't see:

1. Wedding expenses.

2. Travel / hotels. (If your kids end up getting jobs somewhere else, you will want to go see them, hang out, get to know their new cities, etc.). If they are living in small/starter apartments you'll need to plan on hotel expenses for the entire time you are visiting them.

3. Travel expenses for them - even if you aren't supporting them, you might at some point be tempted to buy plane tickets for them to travel home for holidays, have them spend some vacation time w/you, etc.

4. Gifts/support/529 contributions for grandchildren.

One other item to think about if you are looking ahead to those years in your life -- it might also be the time when you are called on to support your parents and your partner's parents. Even if you aren't financially supporting them, there might be travel expenses when they have medical emergencies, legal fees to help them draw up legal papers, etc.

None of this is daunting if you manage to survive paying for your children's education, but it's wise not to assume that spending on kids goes to zero, either.
Last edited by Lookingforanswers on Wed Apr 15, 2020 12:43 pm, edited 3 times in total.
Broken Man 1999
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Re: How did your spending change when your kids left the house?

Post by Broken Man 1999 »

We have been blessed thus far as DDs live nearby. They are very deeply embedded here, good careers. Hopefully that will continue.

We did support my MIL for a few years while she lived with us before she passed. It was nice as she saw her great-grandchildren, and they got to know her.

I only knew my grandmothers, as my grandfathers died before I was born.

Our grandchildren all have full sets of grandparents, and each set knew their great-grandmothers for a time. Kinda nice for them.

We are terribly spoiled having such continuous contact with the grandchildren.

Broken Man 1999

ETA: Ah, weddings. Yep, a couple at $20,000 ea.

And help to buy first house, a couple at $10,000 ea.
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
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CyclingDuo
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Re: How did your spending change when your kids left the house?

Post by CyclingDuo »

FI4LIFE wrote: Tue Apr 14, 2020 4:21 pmSome day I will create a budget and track expenses.
Plenty of apps available that do it for you. :beer
"Save like a pessimist, invest like an optimist." - Morgan Housel
basspond
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Re: How did your spending change when your kids left the house?

Post by basspond »

Broken Man 1999 wrote: Tue Apr 14, 2020 4:37 pm The DDs have told us when the granddaughters are teenagers they will live with us. The old mother-daughter conflicts! I'm OK with that. :D
Do not count on that happening. A close relative got their DD? back after the grandparents kicked her out of their house.
Broken Man 1999
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Re: How did your spending change when your kids left the house?

Post by Broken Man 1999 »

basspond wrote: Wed Apr 15, 2020 7:25 am
Broken Man 1999 wrote: Tue Apr 14, 2020 4:37 pm The DDs have told us when the granddaughters are teenagers they will live with us. The old mother-daughter conflicts! I'm OK with that. :D
Do not count on that happening. A close relative got their DD? back after the grandparents kicked her out of their house.
One granddaughter always remarks how "calm" our home is. It might have something to do of her getting away from her younger brother, who knows how to push her buttons.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
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