Millennials should consider moving back home
August 27, 2015
Millennials should consider moving back home and living with their parents.
This could be the only way this generation will solve its two main problems. The first problem is the growing amount of student debt.
The second problem is the high cost of housing: both rental accommodation and homeownership.
Millennials are age 15 to 35 and for many there is no logical way to live on their own while reducing their debt. The numbers just don’t add up.
This generation faces significant financial hurdles. To clear these hurdles they must do things differently.
The initial reaction of their parents might be that moving back home is an avoidance of assuming adult life. Sounds good in theory but in reality, the world has changed.
During the time their parents entered young adulthood large student loans were uncommon and housing costs were much more affordable. Plus their parents’ job opportunities were stronger.
The cost of post-secondary education has escalated and many students stay in school longer. One degree used to be a bonus decades ago; however, now many students strive to complete at least two degrees.
According to a 2011 Statistics Canada census, 25 percent of young adults between the ages of 25 and 29 live at home. That has doubled since 1981. For many, the term “boomerang generation” was derogatory as if children did not have the ability to leave the nest. If a child is attempting to manage their finances prudently they should be commended for living at home if that improves their finances.
Returning home can be a sacrifice for a young adult after living on their own while away at school. It is an adjustment for all concerned to once again live under one roof.
Although living under one roof with parents can have significant financial benefits for the child, there are added costs to running the household.
Can the parent afford to absorb these costs or should the child contribute?
That is a financial discussion that can occur between the parents and child. One option is the child contributes to the household expenses.
This would be better financially for the parents to have the child at home. Even while contributing to household expenses it is less expensive for the child than having their own place.
All people, young and old, have their own financial objectives and priorities. A large part of our disposable income is set aside for housing.
Understanding the financial implications of shared accommodations is a good first step to setting up a strong financial structure.
We encourage members of the millennium generation and their parents to discuss the pros and cons of living under one roof.