For most of us, it seems a distant dream away. Unfortunately, like it or not, there will come a time where the kids fly the nest. It’s at this point that the general consensus is that the costs, and some responsibilities, come to a halt. However, as we’ll soon find out, this is the wrong way of looking at things.
The point we are trying to make is that you do need to budget for life beyond childhood for the kids. Let’s take a look at this in detail to show you what tends to happen.
Expense #1 – Your own costs
We will come onto the kids in a minute, but let’s start with the costs that you will personally start to incur as you get a little older.
A lot has been made in the news about the costs of elderly care and naturally, this shouldn’t be ignored. Unfortunately, it’s just the tip of the iceberg, and one only has to see the cost of funeral care to see how important it is to plan ahead for this as well.
In short, be aware that your own circumstances change, and you will need to take this into account particularly if you are considering early retirement.
Expense #2 – The college fees
In truth, this will vary all over the world. As we all know, in the US the cost of sending your children to college is astronomical and parents need to save for years, or decades, in order to fulfill this. Then, in the UK, student loans cover the fees – but this might not be sufficient to cover living expenses, which the bank of mom and dad might need to assist with.
Expense #3 – The kids’ house
Once upon a time, mortgages were accessible. Again, if you read the newspapers, you’ll know that this isn’t exactly true in some parts of the world.
Sure, getting a mortgage is completely possible, but only if you save for the huge deposits. With house prices rising across the world, it means that parents are regularly stepping in and assisting their children to get on the housing ladder and ultimately avoid being part of “generation rent“.
Expense #4 – Don’t forget the grandchildren
Following on from all of the above, we have more bad news. Unfortunately, the costs don’t stop there. As soon as these costs stop, you have to factor in the price of paying for the grandchildren.
Several years ago, many may have classed this as unfair. Now, the state of the economy means that most people accept it. Are you obliged to help out with the cost of raising the grandkids? Of course not, and if you are not able to, it’s by no means deemed socially unacceptable! What we are trying to highlight is that the crushing variables in relation to the economy are affecting generations, and the knock-on effect is that grandparents often have to pick up the bill.