Survival guide kids’ financial
How do you deal with adult children returning to live in the family home – without leaving too big a dent in your finances? Vicky Shaw finds out
If you’re a parent wondering if your grown-up child will ever manage to fly the nest, you’re not alone. It’s estimated more than a quarter of 20 to 34-year-olds in the UK still live with their parents – with men being more likely to do so than women. There may be all sorts of reasons for this – perhaps a relationship has broken down, renting is too costly or they’re trying to raise a deposit for a home of their own.
And while it may be great to be living as one big happy family, new research sheds light on the financial pressures the “boomerang” generation of young adults is putting on their parents.
Seven in 10 (72%) of parents of boomerang children say their household spending has increased, although less than half (41%) charge any form of “rent” for their kids to live back at home.
The research, from Skipton Building Society, found finishing university and reaching 30 were often trigger points for moving back in with parents. Some were using the family home as a base to search for jobs, whileothers were nursing a broken heart following a relationship breakdown.
Among parents who were taking contributions from their adult children for household running costs, the average amount was the fairly modest sum of £123 per month.
While some parents spent the extra cash on food and groceries, others were sensibly putting the money away for a rainy day.
To help parents consider ways to ease the strain on their wallet, Skipton has teamed up with Becky Wiggins, parent blogger @EnglishMum, who offers her tips for managing finances:
■ See your child’s return home as a positive. In this financial climate, it’s something that a lot of young people have to do, so there’s really no stigma attached.
■ Whether they’re job-hunting or starting their first job, your boomerang kid may already be saddled with quite a large amount of debt. Be empathetic to their situation and acknowledge how they’re feeling.
■ Being completely open about money suits everyone best. If the kids are worried about money, it’s easiest to get everything written down and chat about a plan for managing the debt.
■ Agree a contribution figure that suits everyone. Skipton found that the average boomerang kid increases household outgoings by £86 a month, or £1,032 a year, so it makes sense that they contribute to the household purse. Regular payments are also good practice for managing bills when they finally move out into their own place.
■ Money aside, there could also be other ways you and your child could help each other. Maybe they could look after the house or pets while you’re away, or you could give them lifts to job interviews.
■ If you’re already in a great financial situation, you could consider having your child home as a great way to help them build up a cash pot, such as a deposit for a house.
■ Don’t feel bad for asking. Now you’re all adults, they’ll understand that you have your own finances to think about and that it’s unrealistic for you to provide everything for them.
■ Don’t ignore your own finances. Having adult children is a big step for you too. It’s a great time to have a look at your own finances, and take stock of savings, pensions, the mortgage and plans for retirement. You could move to somewhere cheaper – and no longer have to worry about buying near particular schools.