How to kick the kids out of home

The Western Star - - MONEY SAVER - AN­THONY KEANE

YOUNG adults are lin­ger­ing in their fam­ily homes for longer than ever, putting pres­sure on par­ents and their own fi­nan­cial fu­tures.

Kick­ing the kids out might seem cal­lous, but there’s a grow­ing move­ment to pro­duce fi­nan­cially in­de­pen­dent young adults – nicely il­lus­trated by last month’s re­port of two New York par­ents tak­ing le­gal ac­tion to evict their un­em­ployed 30-year-old son.

Most par­ents won’t go that far, but they and their chil­dren can ben­e­fit from a few strate­gies.

Max­ine Pagliasso has three adult chil­dren liv­ing at home – aged be­tween 19 and 24 – and all are sav­ing for their fu­ture and pre­pared to look be­yond big cities to get a foothold in real es­tate.

“My hus­band and I had a plan: ‘24 – out the door’,” she said. “Our phi­los­o­phy is they need to buy a prop­erty where they can af­ford.”

Daugh­ter Shari, 24, is work­ing mul­ti­ple jobs and eye­ing prop­erty in re­gional New South Wales.

Mrs Pagliasso said many young adults were savvy and knew what they wanted, but weren’t think­ing far enough ahead. “If they get caught in the rental trap they may never get out,” she said.

“We talk about sav­ing very reg­u­larly at home.”

Record low in­ter­est rates make build­ing a deposit tricky, but new in­vest­ment op­tions can help. Frac­tional in­vest­ing al­lows peo­ple to buy small pieces of a house to share in its cap­i­tal growth.

Daniel Noble, CEO of frac­tional in­vest­ing com­pany CoVESTA that al­lows peo­ple to rent and co-own their homes, said the num­ber of Aus­tralians aged un­der 40 who had never bought real es­tate had jumped 30 per cent in the past decade.

“Right now the av­er­age time to save a deposit na­tion­ally is about nine years, which is nuts,” he said.

“A lot of peo­ple say ‘why bother? Let’s go on a hol­i­day’. Quite of­ten young peo­ple don’t know where to start. Frac­tional in­vest­ing al­lows them to dip their toe in the water.”

Lend­ing or giv­ing money can be tricky. “The Bank of Mum and Dad is the eighth-big­gest bank in Aus­tralia and has the high­est de­fault rate,” Mr Noble said.

Plan­ning for Pros­per­ity ad­viser Bob Bu­dreika said many young adults re­fused to lis­ten to their par­ents, so a separate role model could be used to mo­ti­vate – per­haps grand­par­ents, older sib­lings or a suc­cess­ful fam­ily friend.

Goal set­ting is im­por­tant. “If you don’t have an ob­jec­tive, it’s easy to me­an­der through,” Mr

Bu­dreika said.

Max­ine and Shari Pagliasso. Pic­ture: Adam Yip

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