Nowhere in the literature on parenting does it mention how to get your young adult children off the family payroll.
So it’s no wonder that lots of attention has been paid to the 30-year-old in upstate New York who was taken to court by his parents to get him to move out. You can almost hear other parents thinking aloud: “I hope it doesn’t come to that at our house.”
It shouldn’t. For one thing, this story appears to be one of family dysfunction, not the failings of the millennial generation. For another, there’s an easy way for parents and young adult children living at home to manage expectations.
Call it an agreement, or a contract. Everyone reads and signs it or otherwise indicates that they buy in. “It forces a conversation – here’s what you’re going to do, and here’s what we’re going to do,” said Lesley-Anne Scorgie, founder of the financial-coaching firm MeVest and author of books that include Rich by Thirty: Your Guide to Financial Success.
There are cultures in which it’s normal and preferable for young adults to live at home until they marry or can afford to buy a house. But for many people, there’s an expectation of a linear progression from university or college to a career and financial independence.
When this pattern breaks down, as it often does in our tough job market for young adults, the result can be uncertainty for parents. Should they set out their expectations for their kids to help with costs and responsibilities around the house? Should they charge rent?
Ms. Scorgie has some tough-minded things to say on setting financial ground rules. Adult kids living at home should have a move-out date, and be paying $250 to $500 in total a month toward rent, groceries and internet. Students in school should pay a token monthly amount of something like $50 to $100.
“Even if a kid is saving for a house, it’s very important that you charge them rent,” she says. “It’s about habit formation, not the money. The best possible life skills your kid can possibly get in his or her 20s is to learn how to pay things on time, manage a budget and manage competing priorities for their money.”
If you feel guilty about charging your adult children rent, Ms. Scorgie suggests you put the money aside and give it back to your kids at a later date to help with a big expense such as a house down payment or for further education.
Ms. Scorgie says young adults should be ready to launch – move out on their own – around the age of 26. This allows for enough time to complete an undergraduate degree plus a college certificate or master’s degree, and for a year of getting sorted out in the job market.
She urges parents to start talking with their kids at the age of 16 about plans and expectations when they graduate from college or university. That way, a 10-year path for financial independence is laid out.
The difficulty with rules such as these is that the job market may not co-operate. Grads may not be able to get a job in their field, which raises the question of whether they should take anything they can get their hands on to meet their rent obligations. A recent U.S. study raises doubt about this strategy – it says that people who are underemployed tend to stay that way for extended periods and earn less over the long term (subscribe to my e-mail newsletter and check out the May 31 edition to read more about this research: theglobeandmail.com/newsletters).
The appeal of having a contract or agreement between parents and adult kids living at home is that everybody knows what the expectations are. What you want avoid is a volatile mix of seething parents and oblivious kids. There seems to have been some of this happening early on in the story of the 30-year-old who doesn’t want to leave home.
Still, parents shouldn’t use this story as a point of reference. Ms. Scorgie said her take on today’s young adults is that their issues are mainly related to the job market, not a lack of initiative. “I don’t see a lot of lazy, couch-surfing millennials,” she said.
Rob Carrick