For kids, living with your parents can help you build some financial momentum before you jump out on your own.
On occasion, I’ll be revisiting and updating past columns with the most universal financial advice. This column originally ran on April 30, 2005.
Robert Frost was right in “The Death of the Hired Man” when he wrote that home is where “they have to take you in.” But here’s what Frost didn’t mention: Sometimes going home is one of the smartest money moves you’ll ever make.
Regardless of the initial reason, millions of young adults who have returned home to live with their parents find that it improves their financial well-being. According to Pew Research Centre research, 18% of persons aged 25 to 34 lived with their parents in 2023.
This research poses a thought-provoking query: Does living with your parents as a young adult signify that you’re a failure financially?
My husband and I negotiated a deal with my three adult children when they returned from college: No rent, but every dollar they would have spent on housing had to be saved for their future. I discussed this setup in a column.
Let’s hear the usual criticism.
“She claims they are saving for retirement, good grief,” one critic posted on a parenting forum. “She has lost all credibility. I can’t take her seriously.”
Another piled on: “It seems opposite to her advice for raising independent children.”
But other parents saw the logic: “She’s letting them live at home to save. She says that when she sees they aren’t doing that appropriately, she will start to charge rent. Sounds like a very smart set-up to me.”
Exactly right.
Last year, our two daughters combined their funds to purchase a home, which would have been challenging if they were also paying rent, which can equal some people’s monthly mortgage payments. Additionally, our son is returning to school to enrol in accounting classes during his time off from work.
You have not failed to launch if you live with your parents. Before you go it alone, it can help you gain some financial momentum.
This tactic isn’t new, which is why I’m revisiting a previous Colour of Money Book Club pick, Elina Furman’s “Boomerang Nation: How to Survive Living With Your Parents … the Second Time Around”—a book that has turned out to be much more insightful than I initially thought.
Furman has firsthand knowledge of this problem. She spent her whole twenties living with her mother and older sister after graduating from college.
Furman writes, “I returned to my family home because I had no job and no desire to learn the art of making mocha lattes at the local Starbucks.” “It’s not surprising that so many of us are choosing to turn back rather than run ahead, given that all of the adult goal posts—housing, economic independence, employment, and educational completion—are becoming more and more difficult to achieve.”
According to Furman, who I spoke with in 2005, she developed the book to assist people returning home in overcoming the belief that they are flawed.
The book is a combination of fundamental financial planning and therapy. Depression, guilt, dating, having to live in your old bedroom or basement, being treated like a child again, and acting like a child are just a few of the problems that Furman tackles when returning home (or never leaving).
She makes her views clear by using lists and firsthand accounts. “The Last Supper: Top 10 Things You Should Do Before Boomeranging” is one example.
It might be time to boomerang home if:
- You wake up in a sweat from nightmares of credit-card and school-loan hell at least once a week.
- You have big goals for the future (buying a house, saving for retirement, attending graduate school, starting a small business), but you have no idea how you will accomplish these things living on your own.
- You’ve been hit by a series of harsh life events and need time to regroup.
Furman helps people living at home navigate this challenging area with humour and a ton of common sense. How do you handle, for example, the delicate (pun intended) topic of telling someone you live at home?
“You can cite as many boomer statistics as you like,” she writes. You can discuss the failing economy and the huge unemployment rate until you’re exhausted. But when your sexual life is at stake, it’s difficult to speak those five simple words: “I live with my parents.”
The “Ka-Ching! Minding Your Money” segment is my favourite. Paying off debt or saving for a house, or attending graduate school are two of the main reasons individuals relocate. However, that frequently doesn’t occur. Since they don’t have to worry about paying for rent, electricity, or other home bills, many boomerangers have more money to spend than they usually do. As a result, they overspend when they should be conserving.
Simple techniques to assist people in not squandering their chances.
When you decide to go back to the nest, it’s critical to utilise your time there effectively. After all, isn’t now, when you’re not under as much financial stress, the ideal moment to handle your financial problems?
“Boomerang Nation” offers some straightforward and amusing guidance on overcoming the difficulties of returning home, regardless of the cause behind your move.
