A decade after its release, 2006’s romantic comedy Failure to Launch still holds true: many young adults are in no hurry to leave home. In fact, the numbers are climbing. A Statistics Canada report released in 20161 confirms that in 1981, 27% of Canadians, ages 20 to 29, lived with their parents. By 2011, that number grew to 42% — a whopping 1.8 million young adults who either never left home or returned after living elsewhere. They’re the boomerang generation.

For their boomer parents, cramped quarters may be the least of their concerns. The same Statistics Canada report revealed that in 2011, 24% of these 20-somethings were employed full-time, year-round — yet 90% had no responsibility for household payments such as rent or mortgage, taxes, electricity or other services or utilities. And although 49% of Canadian retirees say they’ve saved enough for retirement (spending an average of $2,611 a month on food, housing, transportation, entertainment, income tax and savings),2 they’re likely not prepared to cover additional costs for stay-at-home kids.

To manage the financial (and potentially emotional) impact of a not-so-empty nest, Vancouver-based freelance writer and former boomerang kid, Christina Newberry — author of The Hands-on Guide to Surviving Adult Children Living at Home and founder of AdultChildrenLivingatHome.com — recommends a contract. Parents should sit down with their kids before they move back and agree on:

  • rent,
  • how other expenses — groceries, utilities, internet, insurance — will be covered,
  • fair use of shared resources such as the TV, computer and car,
  • division of chores and cooking,
  • house rules — including noise levels and privacy (for both parents and kids), and
  • how long they plan to stay.

According to Newberry, “a successful relationship with your adult children living at home really boils down to establishing good ground rules and managing expectations. One of the best ways to do that is to create a contract that everyone in the home will stick to.”3

What’s stopping them?

When young adults don’t leave home, it tends to be about finances or the need for emotional support.

Financially, some may still be in school, looking for work, earning low wages or saving up to buy their own home. Some have substantial student loans:

  • A student attending trade school, college or university full-time can expect to pay between $2,500 and $6,500 per year or more in tuition. Books, supplies, student fees, transportation and housing only add to that total.
  • In 2014-15, full-time students in Canada paid an average of $16,600 for post-secondary schooling. That’s more than $66,000 for a 4-year program.
  • In Canada, the average student graduates with over $28,000 of debt.

Emotionally, some may be dealing with a relationship breakdown – which can, in turn, have financial fall-out.

Gender and geography may also play a part.

  • Young men are more likely to live at home than young women. In 2011, 46.7% of men in their twenties lived with their parent compared to 37.9% of women in this age group.
  • In Canada, the highest proportion of young adults living at home in 2011 was in Ontario (50.6%). Provinces with the lowest proportions were Saskatchewan (30.6%) and Alberta (31.4%). Some of these results are associated with cost of living within a region.

Census in Brief, Living arrangements of young adults aged 20 to 29, 2011; Cost of post-secondary education, Canada.ca; Canadian Federation of Students, What are the parties saying? Student Debt and Tuition Fees, 2015.

How you can help

If your clients want to learn more about registered education savings plans (and help their kids avoid hefty student loans), encourage them to watch Sun Life’s Simply put: What are RESPs? video.

If your clients have yet to determine their own retirement expenses and how they’ll fund them, share Sun Life Financial’s Retirement Expense and Income Workbook with them. A good understanding of their own financial needs and retirement goals will help them understand how much they can help their kids, if or when the time comes — without compromising their own situation.

What can it mean for some parents?

According to a CBC report, adult children living with their parents and not paying expenses is one reason why a growing number of seniors have debt issues. Other reasons include easily accessible credit and lack of planning.

Other resources to suggest include:

  • Newberry’s website, and
  • Rob Carrick’s five money tips for young adults. Carrick is a long-time personal finance columnist for The Globe and Mail. He’s also the author or How Not to Move Back in With Your Parents: The Young Person’s Complete Guide to Financial Empowerment — a book that explores both the financial challenges and opportunities young people face today.

You might also like…

1 Insights on Canadian Society – Diversity of young adults living with their parents (June 15, 2016)

2 2016 Sun Life Financial Retirement Now Report

3 AdultChildrenLivingatHome.com: Excerpt from How to Avoid the Top 5 Mistakes Made by Parents with Adult Children Living at Home