Multigenerational adult households are becoming increasingly common here in Australia. Results from the 2019 Housing, Income and Labour Dynamics (HILDA) survey indicate that more than 50% of younger Australians aged between 18 and 29 are still living at home with their parents.
Before 2020 there were already many different reasons for this growing trend… high real estate prices, slow wage growth, casualisation of the workforce, people studying for longer and a delay in traditional motivators such as marriage and having children. But now with the addition of a global pandemic, leaving the safety of the family home is even less appealing. Plus, with the grim economic outlook for many young adults, it’s likely there are more boomerang kids knocking on Mum and Dad’s door again.
Set expectations
Whether your kids are boomeranging back, or they are yet to leave home, it’s important that you set expectations and create practical boundaries within your household. The truth is… your kids aren’t really kids anymore, so you should resist the urge to fall back into full parent mode where you manage all aspects of the house.
If they have spent any time living away from home, they will have the skills to cook, clean and do their laundry. And even if they haven’t experienced a share-house environment, they are still old enough to do their fair share and take on responsibilities.
Taking the time to have a family meeting where you discuss how to split the bills, the delegation of chores and maintaining individual privacy, will make sure that every member of the household understands what is expected of them.
Encourage financial independence
It is a natural instinct for parents to want to support their children – especially if that child is experiencing financial hardship or other challenges in their life. Providing them with a safe roof over their head during a time of uncertainty is invaluable. But you should also encourage their financial independence.
If they are studying, are unable to find a job or have recently lost employment, there are a number of government support payments they might be eligible for through Centrelink. For example, the JobSeeker Payment is available for people over 22 years of age, or if they are younger, they might be able to access Youth Allowance.
Implementing a set amount for room and board instils financial responsibility and helps build independence. Regularly contributing forms good habits that young adults will carry with them well into the future… especially when they eventually have to fully provide for themselves.
Setting budgets and learning how to save might seem like a dry conversation topic, but mastering these skills while still under your roof will put them on the path to a strong financial future.
Their own home
One of the most common reasons that children move back in with their parents is to save money to purchase their own home. Living with reduced rent or even rent-free for a short period of time can certainly help with saving for a deposit.
In this instance, some parents might consider gifting children a lump sum or even using equity in their own home as security towards their child’s property purchase. This is a highly personal decision and there are many factors to consider, including the impact on Age Pension eligibility. Maintaining your own financial security is essential and we recommend seeking professional advice before making any commitment.
Protect your finances
No matter how much you love your children, you need to make sure you protect your own financial position. Because in the long run… if you become financially unstable then you will no longer be able to offer them help when they need it.
Having additional people under your roof costs money. Extra food in the trolley at the supermarket, higher electricity bills and more devices consuming your internet data. Make sure you account for these extra costs from the beginning and, as suggested above, discuss how to divide each bill. This will help to reduce the potential for conflict and hopefully stop you from having to bear the expense.
Happy families
Finally, it’s important to remember that at the heart of your home, you are a family. Regardless of the financial agreements you make, there will still be times when you disagree as well as those wonderful moments where harmony resonates and everyone is smiling.
Open communication and respecting each other’s boundaries go a long way towards creating an enjoyable living environment. Remember that they will learn from you, so the best thing you can do is help to prepare for their eventual independence.
Our team of Financial Advisers can offer you and your family guidance on how to start planning for tomorrow. If you’d like to find out more, contact us today. Read more Financial Planning articles.
