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Children Leaving Home: Helping Your Kids Prepare to Move Out & Be Financially Secure

Personal Finance
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mother standing with son and daughter discussing leaving home

Everyone flies the coop eventually, but you want to help your children be positioned for success. Whether your child stayed home to work after high school, moved home after college, or returned home after living on their own, eventually you may wonder, "When are my children leaving home for good?" You may need to prepare yourself to have a conversation with them about moving out. Here are some tips to consider.

Preparing for the Conversation

Before bringing up the topic, think about why now is the right time. Is your child succeeding at work and ready to shoulder more adult responsibilities? Do they need a push to socialize more with their peers or live closer to them? Or perhaps you're ready for an empty nest — whether you want to downsize or just have the house to yourself.

After developing your rationale, think about a time frame. It can take a few weeks or more to find housing and furnishings, and it can take longer than that to save enough money to cover the initial move-in costs.

Find a good time to raise the subject with your child, knowing it may require several conversations to cover the details and offer your assistance. Your child might feel nervous about moving out, or even angry that you've brought this topic up. On the other hand, they may feel grateful for the push if they weren't ready to make the move on their own. However they may feel, it's good to know exactly what needs to be discussed to prepare them for independence.

Helping Your Children Be Financially Ready

Part of preparing your children for leaving home is making sure they're financially ready. That doesn't mean handing them your credit card or telling them to send their bills home. Instead, it means helping them have financial literacy and a plan. Focus on discussing these key areas:

Basic Budgeting

Budgeting in your early 20s may be a little different from budgeting in your 30s or budgeting to prepare for retirement. Your newly launched adult should have a budget that includes rent, transportation (car payments/insurance, ride-sharing or public transit), school loans, food, clothing, entertainment, utilities, investments and an emergency fund. Of course, there are other categories as well, and it may be helpful to talk about how your child wants to spend their money or save for specific goals.

Buying Insurance

It's not exciting to spend money on insurance, and it can be hard for your child to allocate funds to something they think they'll never use. But you can help them understand its importance. Their employer may provide health, disability or life insurance in full or at a discount, or they may want to get insurance on their own. They can also consider additional insurance products such as renter's insurance or car insurance (if they own a car).

Investing

Investing for the future is difficult when your child is just starting out, especially with school loans and an early-career salary. But even saving a small amount each month or pay period helps develop the habit of saving and investing. Your child should understand how compound interest works, and why investing money now may pay off later. Comparing saving to "paying yourself first" may help encourage your child to build a solid financial future.

Retirement Planning

Retirement planning goes hand in hand with investing. When just leaving home, your child may want to make saving for retirement a priority over general investing. Share the various types of retirement plans with them. Traditional IRAs and 401(k) plans can be funded with pre-tax money, and Roth IRAs and 401(k) plans can be funded with post-tax money. The right option for your child will depend on their financial situation. Some companies match employee contributions and provide educational seminars to help educate employees on the options.

It's a big, complex world for young adults just leaving home. But this is an important part of life that can help determine your child's future. A few well-meaning conversations can impact their financial well-being in a positive way.

IMPORTANT DISCLOSURES
Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.