Planning ahead: The real costs for when the kids fly the nest
As we sit here right now, it feels as though the time when the kids fly the nest will never come. After all, adulthood appears a million miles away.
Let’s not get into scaremongering; there is probably plenty of time for most of you until your kids are old enough to leave home. For some of them, it might involve going to university, while others might leave for the big world of work. Whatever the reason, it will affect your life – and not just emotionally.
Quite often, we are mistaken into believing that it’s only our heart that is going to be affected when the kids do leave home. As it turns out, there are a lot of financial surprises, which is what the remainder of today’s post will look at.
Your own costs of getting old
Unfortunately, while this first point is somewhat morbid, it’s something that you absolutely have to keep in mind as you approach your later years.
There has been a lot of talk in the press about how much elderly care costs over the last few years, and it is for very good reason. There is genuine concern amongst some people that the costs could spiral to such a level that some generations are really going to struggle to get the care they need. As such, rather than relying on the system to provide for you (although it probably will to some extent), make sure that your own finances allow for this. This might mean creating a separate account or even investing the money. Regardless, just make sure that you have at least a small nest egg for care in your advancing years.
Then, there is the topic of funerals. Again, it’s morbid, but the costs of funerals are also spiraling and can leave your loved ones with a huge bill. Fortunately, there can be ways around this, such as paying for your funeral in the present time. It at least will mean that your family aren’t left to foot the bill, and it’s a method that can actually save you money as well.
Sending the kids to college
This next point won’t come as a surprise in the slightest. After all, the average college fees are significant, to say the least – and you need to plan years in advance if your children are opting for this route. The costs can of course vary depending on where in the world you are based and if we switch to the UK for example, the government will at least cover tuition fees courtesy of a favorable loan. However, there are other costs to take into the equation, such as accommodation, so there always will be financial considerations when it comes to further education.
Will you join the bank of mom and dad club?
This next point is a little more recent, but studies have shown that the bank of mom and dad is one of the biggest “mortgage providers” for children. Of course, this tends to relate to the cost of funding the deposit for a home, but the statistics are still frightening.
Do you have to contribute to such costs? Of course not. However, it’s becoming more normal so to speak, and something to keep in the back of your mind.
Last but not least; the grandkids
We’ve spoken about your children through the course of today’s post, so let’s conclude things by talking about your grandkids. Again, you are not under any sort of obligation here, but due to the financial woes that some generations are experiencing it is becoming more common for grandparents to come to their aid. This might be with college fees or with the house buying process, but be aware that the costs might not be over for a number of decades!