Millennials – the new transformers
Millennials are now the largest cohort in the Canadian workforce. Small wonder they are driving workplace transformation and are destined to reshape our country and possibly the entire world. And yet, many of them still live at home.
According to the 2016 Canadian census:
34.7 per cent of young adults aged 20 to 34 were living with at least one parent in 2016, a share that has been increasing since 2001.
62.6 per cent of Canadians aged 20 to 24 years lived with their parents in 2016 – compared to 58.3 per cent in 2001.
Millennials choose to remain at home for reasons that range from the financial constraints they now face, staying in school longer to effectively compete in the job market (while shouldering steadily increasing post-secondary education costs), to escalating housing costs.
Parenting styles like “helicopter parents” (who hover over their children and micromanage their lives) may also be a factor in the millennials’ decision to linger longer at home. One downside for parents of many millennials is having double-duty responsibility for their older children and their own parents. These are “sandwich generation” parents, whose emotional and financial support of both their parents and their children can take a tremendous toll on retirement savings.
While it’s true that for many young adults, living with parents is a fiscally responsible decision even when they are working full-time and can be an ideal way to save for a house or start a business – leaving the nest is an important rite of passage for both parents and children. And whether the move is months or years away, it’s a good idea to set a date and make a plan. +ere’s how to prepare for nest-leaving:
Pay off debt – especially highinterest debt, before it’s competing with your rent or mortgage payments.
Establish a good credit history – get a credit card for small purchases and always pay the full balance by the due date.
Save for major purchases – pay cash for furniture, appliances and other large purchases.
Build an emergency fund – for minor setbacks like home or car repairs.
Both millennials and their parents should talk to a professional advisor about strategies to help avoid hefty debt and to balance priorities while maintaining a sound, long-term financial plan.
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.