Moving home to save money? Read this first
Your family has just sat down to a festively set dinner table and the turkey is being carved. Libations and good cheer are flowing.
“Honey, we’ve been thinking,” your mom says … and without waiting for your response, she goes on … “what if you come home?”
“I am home, right here right now!” you reply happily.
“We were actually thinking it might be helpful if you moved home for a while,” your stepdad offers.
The wheels in your head start turning. Your parents might just be on to something good. Heck, your friends are doing the same thing. How else are you ever going to get ahead?
“Let’s chat more about it tomorrow,” you say with curiosity in your voice.
No surprise here, many twenty-, thirty- and forty-somethings can’t seem to keep up with the cost of living.
This is not an avocado toast and overspending on video games at Christmas kind of problem.
It’s the stacking effect of inflation, rising rents, high interest rates, pay increases not keeping up, too much debt, skyrocketing payments and, and and …
If you’re thinking of asking your parents if you can move back in (or they with you), or they’ve approached you with this idea, I believe it’s worth seriously considering. There are financial and personal benefits when healthy boundaries are in place.
Talk through the benefits and drawbacks
Call to order your family meeting and map out the pros and cons of living together. There are generally efficiencies in finances, the ability for the adult child to save (or just plain catch up with debt), and in some cases share in the expenses related to operating the home. Beyond money though, it could be helpful to have a second set of hands to shovel snow, assist with child care, help with medical appointments or housework. It could make or break a parent’s decision to age at home or not.
The drawbacks need to be considered, too. For example, flagging that the space could get cramped or that your privacy would be hinged upon should be stated. Maybe you’re all struggling to get along as it is. Only when you look at the benefits and drawbacks together can you truly tell if it’s a good idea.
How will this all work?
Will you pay rent to your parents or help them with certain costs? Is there an expectation that you save, get a job, prioritize health or pay down debt? Do you have to show them your bank statements? What if your spouse is home for the next year with a new baby, is there any help you can rely on regarding care? Who’s cleaning the house and taking down the Christmas lights? If care is required for a parent or for an adult child, what does that look like? How long will this cohabitation go on for?
If you’re selling one house and using the proceeds to renovate the family home into separate units, which is increasingly more common these days, who goes on title of the property and who’s on the mortgage? Explore all the scenarios and think about the boundaries that would help make living together a success.
It’s during times of financial reprieve that adult children can get really good at money management
Financial stress hampers your ability to think strategically about your finances. Some of my students have reported they have a hard time even physically reading their online banking when under pressure. As with most stress, interrupting it offers a bit of space to take a deep breath and look ahead to see what a good next step might be. It’s an opportunity to learn how to budget better, improve on financial literacy, discover what makes a good investment and craft a plan for your money for the next year or two. Embrace the financial reprieve, and make it a priority to become financially savvy, while you’re at home. Your parents will cheer you on, loudly.
Enjoy the benefits, because they might not last forever
Intergenerational living is an ancient practice and extremely common in many parts of the world. You’re seeing a great deal more of it here in Canada as we move into 2024 while we continue to face a housing affordability crisis, and a loneliness crisis. I don’t know if or when these themes will shift for the better, but for now, I’d make the most of it if you’re moving home. Find the success in the financial gains and enjoy the opportunity to be together … it’s just like an extended holiday season.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
