The late 1980s TV series “Home to Roost” saw Henry Willows (John Thaw) have his life turned upside down after his 18-year-old son Matthew came to live with him. Today practical economics has made adult children living at home a reality in many families. The current generation of young adults face a number of challenges on the journey to (financial) independence.
The Cost of Education
While politicians wrangle about tuition fees, parents know that the real cost of an education goes way beyond that. Put quite simply, people need to live while they’re studying and that means paying for housing costs if living away from home, and still having money left over to pay for other living expenses.
The Changing Nature of The Job Market
These days getting that first job may mean starting off on a zero-hours contract, working part-time or temping. It may even mean accepting a period of voluntary work or an unpaid internship to get a foot in the door of a particularly competitive industry. None of these are necessarily ideal situations for independent living in general, nor for satisfying the affordability criteria for mortgages in particular.
The Property Market
There’s a lot that could be said about the property market. One key point is that deposits are massively important and it’s much easier to save for a deposit when living rent-free with parents than when paying rent elsewhere. For first time buyer mortgages a deposit is vital but there are schemes such as help to buy that enable young people to get on the ladder more easily.
Multi-Generational Homes Should Be a Matter of Choice
Anyone who’s watched period drama’s such as Downton Abbey will know that multi-generational homes are nothing new. Several generations of the Crawley family all live together (more or less) happily. Admittedly Downton Abbey was substantially bigger than many modern family homes and lifestyles and expectations back then were very different. Modern homes can work on a multi-generational basis, but this should ideally be a matter of choice. It should also be clear how financial responsibilities are shared between members.
The Cost of Keeping Children at Home
If adult children are able and willing to pay their share of the household bills then there should be no adverse effect on the family finance. If, on the other hand, parents are effectively subsidising their adult children then their own personal wealth may suffer. Savings may be used up and plans for investing may have to be put on hold. In short the presence of adult children in the house may be a sign that it’s time to get some advice from a professional financial adviser to help them to move on.
Helping Young Adults to Spread Their Wings
The first step to nudging a young adult gently out of the nest is understanding why they’re in it in the first place. In some cases there may be non-financial reasons at play as well as financial ones. For example if parents are doing all the housework as well as providing financing then this may be a strong incentive for adult children to stay in the parental home.
Resolving Financial Issues May Also Require Looking at a Situation from a Non-Financial Perspective.
For example if a young adult is struggling to find stable work then it may be helpful for them to get some career advice. This can look at the skills, abilities, and qualifications they have at the moment and see what their options are right now. This might also be an opportunity to see if there are any “easy wins” to help get young adults into work. For example first aid certificates, food hygiene certificates, and SIA licences are all relatively easy to obtain (at least compared to a degree) and can help kick-start a young adult into some form of employment.
Some parents may find it appropriate to gift their children cash to help them on their way, for example to provide a deposit for a starter home. This may be seen as their inheritance in advance and in some circumstances may be helpful from the perspective of reducing a parent’s tax liability. Such gifts however, should be looked at in terms of each individual’s situation to ensure that they are appropriate and will be used sensibly.