From empty nest to nest egg: financial planning

Nest egg financial planning

The emotional stress of an “empty nest” when a child leaves the family home should not be underestimated. It can be hard to start thinking about your own future and finances when you’re used to focusing solely on your child’s wellbeing. So, how can you make a healthy transition from an empty nest to building a nest egg in terms of your financial planning?

For many parents, it feels like a split second between the time their children were jumping in puddles to suddenly becoming fully grown adults, ready to go out into the world. A common scenario for many parents is the trek to a new university with your child and a car packed full of their belongings, often resulting in a tearful journey home. Small day-to-day things can have great meaning; a usually noisy home becomes silent, their favourite snack left in the cupboard, or a song being played on the radio they used to listen to in their bedroom.

“While Empty Nest Syndrome was not a clinical diagnosis, it is widely recognised that when children leave home, parents – particularly mothers – experience a sense of sadness, loss, depression, loneliness, distress, and even a loss of purpose and meaning in life.” – Tony Cassidy, professor of child and family health psychology, Ulster University

Although more commonly associated with women, even famous TV chef Gordon Ramsey described feeling “gutted” when his son Jack left home for university. People tend to swing from agonising feelings of the child not being around to no longer feeling necessary in their child’s life. One of the biggest changes is having more time, which sounds great, but for some, this can feel like they suddenly have too much time on their hands.

As well as the emotional turmoil caused by your child’s departure, there might be financial implications too. For example, are you supporting your child while they’re studying at university? Perhaps you are saving towards a nest egg for them rather than focusing on your savings? Of course, you must factor everything and everyone into your financial planning, but don’t forget about you.

A hugely important and defining chapter in your life has closed, and as difficult as it feels when your child leaves home, time is a great healer. Once you are ready, you can reframe the situation and start thinking about your own needs.

From Empty Nest to Nest Egg: Financial Planning

Now, as a parent, you know children don’t come cheap! So no doubt, the majority of your hard-earned money goes towards them. Investing in the future of your children is a great way to give them a headstart in life, but now they’ve flown the nest, you may find comfort through building your own nest egg, so you can plan those activities you’ve never had time to do before. For example, if you missed out on a gap. Or maybe you’ve always wanted to move to the seaside? Perhaps it’s time to take up that expensive hobby and convert the spare room after all?

Here are areas to consider when you’re thinking of building a nest egg:

  • Check your savings and investment strategy. Have you got money sitting in various accounts incurring little or no interest? Do you have any investments that need a revisit?
  • Revisit your goals. A big life event like this might make you view things a little differently and change your plan for the future.
  • Get a pension review. Will you have enough pension income to support your chosen lifestyle?
  • Could you turn your empty nest into your nest egg? Downsizing could potentially boost your nest egg – a third of retirees in the UK plan to move to a small home to free up some much-needed cash in retirement. Or maybe it’s time to renovate and make home improvements to boost your home’s value further, before making a move.

It’s never too late to start building a nest egg. Making a financial plan is the first step, and this needs to be based on your set of goals and aspirations. Think about what you want to do and when you want to do it. Decide on when you would like to retire, and then work out if you will have enough income to help you enjoy the years ahead and support you throughout your retirement. And don’t forget to factor in any big life events.

If you would like a financial review to help you plan and build your nest egg, get in touch to speak to our independent financial planners.