Personal Finance Tips: Children Leave Home

Congratulations! You’ve done it. You’ve raised your children to the point where they are heading out into the world to chart their own lives. Although you may be experiencing empty nest syndrome, there is still a lot more you can do to help your kids learn how to manage themselves successfully out there in the real world – particularly financially.

Here are 3 personal finance tips to teach your children when they leave the house:

1. Budget

The first and most important personal finance lesson, especially when you have left the family home, is how to budget. Without a budget, it can seem like money is vanishing without clear accountability or reason.

A good first step in budgeting is listing your expenses month by month. Encourage your child to create a list of exactly what they have spent money on during the month. This will highlight areas in which they are overspending immediately. A great lesson in making money a lot more tangible. (Check out our free budget calculator if you need some help setting this up)

A budget should include income – allowance, wages, gifts – and expenses – accommodation, food, travel, vacations, entertainment.

A budget will allow your child to get a holistic picture of their finances and help them to start making better decisions each time they spend money. From there, they can slowly start to understand the concepts of modifying their income and spending goals to meet their needs and aspirations. A great site to set up your budgeting is

2. Save

It is beneficial to emphasize the importance of saving to your children, as the earlier they get into the habit, the better for their adult years. Besides saving for things like a vacation or a new outfit, a good place to start is a small emergency fund.

Highlighting the benefits of an emergency fund to your child will not only teach them the cost of certain things, which they may otherwise take for granted (how expensive it is to repair a car, to replace tires, or to have an unplanned medical procedure) but will help them to be a part of the solution. If they are able to contribute, even a small share, to these types of unexpected costs, they will be able to get a sense of being part of the adult world.

Like many types of insurance and protection, an emergency fund seems to lack clear use until it becomes essential.

3. Invest

While your child is likely at a stage where they don’t have much money to invest, it is good to teach them early on just how money can compound when invested. You may have invested significantly in various college planning vehicles, like a 529 plan. Including your child in the regular assessment of these investments, explanations about how they work, etc. can be exceptionally beneficial.

Although investing can be complex and difficult, particularly for young adults, with the right exposure and training they can start to get a handle of it before they enter the full-time working world.


As college is often the first time many young adults are out on their own and have a new level of freedom, it can result in a variety of negative financial practices that over time can be quite damaging. We discuss this in our blog Financial Neurosis. By teaching your child sound financial thinking early on, you can help them to develop good financial habits that can help guide a lifetime of prudent personal financial management.

It’s a big milestone when your child is finally ready to make their place in the world, and with the right guidance, they can have a much stronger chance of succeeding in it.

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