By: Lee Hancox
Just when you thought you could finally enjoy your own money, they move back! Globally, many young people are either waiting to move out of their parents’ homes or ‘boomeranging’ back to live with their families, for economic or lifestyle reasons. How to navigate the financial challenges and strains of this reality?
Flux Trends found that in the US, most young people (aged 20-34) are living at home, and in the UK, the number of single, child-free 20-34-year-olds staying with parents rose by 55% between 2008 and 2017. South Africa is seeing something similar, according to UCT Liberty Institute research.
I can relate to this reality, and believe that in many instances, it can be a useful stepping stone until we’re able to stand on our own two feet. I moved back in with my parents in my young adult years and now have an adult daughter living at home. The cost of living and renting is ridiculously expensive for young people. My daughter and her boyfriend want to move out and live their own lives, so they’re saving towards that.
It can be enjoyable and rewarding to have your adult children back in the nest, but it’s important to have the right boundaries from both sides. It’s about working together rather than against each other and helping each other – whether that help is in cash or in kind. It’s also important to get the balance right, as an overly lenient approach may, however, impact our own financial plans as parents. This may mean postponing some important financial decisions later than we should. Granted, there is also the opposite that happens later in life, where some parents move in with their kids – so we need to be cognisant of the fact that at some point, the dynamic may reverse.
Hancox highlights the need for honest conversations, boundaries, and grace.
Honest conversations:
When your young adult lives with you for longer than expected or returns home, you need to have an open conversation about how you will jointly navigate this decision.
- Be honest about compromises and contributions to costs.
- Get clarity about the anticipated time frame linked to their stay at home.
- Be upfront about expectations and goals – such as your expectation they’ll save and start an emergency fund while they’re with you. Put a timeline in place for each milestone.
- Talk about how you’ll try to evolve your relationship to more of an adult-to-adult rather than a parent-to-child dynamic.
- Be sensitive, as it’s not always by choice that they are staying with you. Sometimes it’s out of necessity, even though they would very much like to be independent.
It’s about being realistic and reasonable on both sides. You obviously want to help your children reach a point of financial security. But you also have a responsibility to ‘call them out’ in a respectful adult manner if there’s clear evidence of excessive spending with insufficient attempts at saving.
Check in with each other often. It’s easy for resentment to build, so keep open lines of communication. Sanlam’s Dirty Word research – which aims to get ‘Mzansi’ talking about money more freely – involved a survey that showed that 60% of people don’t talk about money growing up. If you didn’t talk about money as a family when your child was little, then money talks with your adult child may be a challenge. A financial adviser or coach can help to manage the emotions linked to these tough conversations to set the framework for discussions that will benefit everyone.
In fact, the value of exposing a young person to a financial adviser from the get-go has significant potential benefits. An adviser may become a partner to them as they navigate their different life stages, each with its own set of financial realities.
Boundaries:
I was married for five years and was on my own for two years before I moved back home with my parents with my baby daughter. They were so welcoming, but it was difficult for everyone to manage the dynamics of our new relationship. Even though I paid rent, our presence still meant an additional cost to them. As their child, I struggled to see that. Now, as a parent, I realise how hard it is to know how much to do for your child and what to leave to them to figure out.
From my experience, it’s best to have clear boundaries from the get-go on what you’ll cover and what your child needs to contribute. If a young person cannot contribute financially, find other ways they can help out, so they feel like functioning members of the household. Set your own financial boundaries as parents. You’ll likely need to revise your budget and savings to safeguard your financial future.
Grace:
You need to have grace – with each other and yourselves. Young people should give themselves grace in these contexts, and parents, equally, need to have compassion for their own realities and the need to prioritise their wellbeing.
* Hancox is the head of channel and segment marketing at Sanlam.
PERSONAL FINANCE