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Kids are staying home with parents longer than they used to. In 2021, 45.8% of Canadians age 20 to 29 lived with at least one parent, up from 32.1% in 1991. More expensive cities have more young adults at home. “Expensive city” isn’t always the reason young adults are living at home. Finishing post-secondary education, wages that don't quite cover the cost of living alone, and wanting to save money before finding their path outside of the family home are often cited for kids continuing to live at home.

This increase of more young adults living with parents affects both generations in a lot of ways. This article introduces two: how young adults get real, hands-on experience with financial decisions and their consequences, and how parents' own finances change when the cost of supporting kids stretches on longer than planned.

Here are the costs parents commonly cover for young adults living at home:

• housing costs
• groceries
• cell phone plans
• vehicle and health insurance
• vacations/travel

When parents and kids sit down together to talk through monthly costs and review options, everyone gets more clarity on what's being spent, and where. Kids learn from these conversations even when they aren't the ones making the decisions. In my practice, about 80% of the questions clients ask me are connected to income and spending, so if you're the one starting these conversations, be ready to take a good look at your own spending too. Knowing your own limits and boundaries is what helps you show your kids how to build theirs.

Some parents are heading into retirement still carrying a mortgage, or working longer than planned because they're supporting their kids. That's not a judgement, that's stats. If this sounds like you, understanding where these decisions lead can help you avoid outcomes you didn't choose and be clear on what you can, and can't, take on for yourself and your kids. Knowing the long-term picture means fewer surprises, less frustration, and a lot less risk of landing in an unstable financial position. It also gives you and your kids something to plan around together: sharing costs, agreeing on timelines, and setting clear parameters on who's doing what, for how long.

If your young adults are at home and you’re ready to have more direct financial conversations with your kids, and with yourself, here are some suggested starting points:

• How are your kids contributing to the household:  Day-to-day tasks?  Specific projects like small repairs?  Financially through paying rent?  Would you like to change how your kids are contributing?  If yes, what would be valuable to you?
• What costs are your kids covering directly for their own expenses?  The most common areas I see are cell phones and car insurance.  When do you expect them to cover those costs on their own?  Have you communicated that to them?  Have you reviewed these costs for affordability, where they rank in your personal values, and other options?
• Are your own finances on track? Will you be financially stable over the long term?  Have you reviewed your own short and long-term goals against your finances?  Is your net worth portioned in a way to support your goals?

Further thoughts:

Three conversations I regularly have with clients about adult kids and money:

1. Gifting while alive versus through an estate
2. Support versus interference
3. How much of a kid's monthly spending comes from parents rather than their own earnings

I will cover these conversations in future posts.