Why Your Millennial Kids Are Moving Back Home

20- and 30-somethings are living with their parents for longer. Find out what this means for you and your finances.

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The only thing constant in life is change – especially with each generation. You don’t have to look too far to see that millennials are doing things very differently than their parents. Millennials are now the largest cohort in the Canadian workforce. This demographic group is driving workplace transformation. They are destined to reshape our country and possibly the entire world… and yet many of them still live at home.

Compared to previous generations, children are living with their parents much longer – well into their adult years. Is it harder for millennials to strike out on their own? Are we parenting differently? We explore factors that are driving the crowded nest trend and ways to prepare for the delayed but inevitable leap.

Talking about my generation

One upside to our children living at home longer is that we’re less likely to experience sadness about an empty nest – when it eventually happens. The downside is that supporting our children well into adulthood can take a toll on retirement savings. If you’re also caring for parents, you’re likely spread fairly thin, in terms of your time, as well as financially and emotionally. These double-duty caregivers comprise the sandwich generation.

If you’re among the caregiving sandwich generation or expect that you will be, it’s critically important to understand the entire financial picture. This means learning about your parents’ financials, including any insurance, savings, assets and debt. Also explore all possible tax breaks and government benefit programs available to Canadians who are caring for adult dependants.

If you’re among the caregiving sandwich generation or expect that you will be, it’s critically important to understand the entire financial picture.

On the child support side of the sandwich, proactive planning is the key to helping them with post-secondary studies. If your Registered Education Savings Plan (RESP) doesn’t cover your children’s education plan, talk to a professional about strategies that will help avoid hefty debt. They can help bring the entire picture in focus so you can balance all of your priorities without sacrificing your own long-term financial plan.

The crowded nest

While the youngest millennials are still in high school, the elders of this generation turn 36 this year. Unlike their Baby Boomer and Gen X counterparts however, these young adults tend to live with their parents much longer.

This crowded nest trend is driven, in part, by financial constraints faced by today’s young adults. Generally speaking, they have to stay in school longer to effectively compete in the job market while the cost of post-secondary education steadily rises. Many university graduates are strapped with student loans that make it difficult to leave home. Housing costs are another roadblock to independent living.

Parenting styles may also be a factor in our children’s desire to linger a little longer at home. It’s no coincidence that the term “helicopter parenting” became part of our mainstream vocabulary during the millennials’ lifetime. It describes ultra-protective parents who hover over their children and micromanage their lives. We’ve even coined a phrase to describe children who return home after trying to make it on their own. These so-called boomerang kids can have an even greater impact than those who never leave.

“I was heartbroken when Braeden moved out but I got used to it,” said Sandy, a 49-year-old mother in Kelowna. After encountering financial difficulties, her son returned home and they both had to readjust. “He had unrealistic expectations about living on his own… he just wasn’t prepared,” she explained, adding that the taste of freedom had at least motivated him to save for the next move.

For many young adults, living with parents is a fiscally responsible decision even when they are working full time. It can be an ideal way to save for a house or start a business. Leaving the nest, however, is an important rite of passage, for both parents and children. Even if the move is years away, it’s a good idea to set a date and make a plan.

Nesting Numbers

  • 42% of young adults age 20 to 29 live with their parents, which is a significant increase from 30 years ago.
  • 63% of young men and 55% of young women age 20 to 24 live with their parents.
  • Almost one-quarter of young adults who live in their parental home have left at some point in the past.
  • Ontario had the highest proportion (50.6%) of young adults who live in their parental home. Saskatchewan had the fewest (30.6%).
    – Statistics Canada
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