Leaving home is a major milestone for many young adults. Living independently is often a first step into adulthood – although suddenly having to make ends meet can be a challenge.
In recent years, due to rising rents, relationship breakdowns, or the cost of living crisis, many young people have taken the decision to move back to the family home – and your son or daughter may be one of them.
Additionally, with increasing numbers of university students now looking to live at home to save money, the likelihood of your adult child living with you is now higher than it has been in years.
Indeed, according to data released by the Office for National Statistics (ONS), around 4.9 million adult children were living at home with their parents in 2021.
There are several things you can do to help you manage your budget and maintain your lifestyle while your adult child lives with you.
So, keep reading to find out three useful financial tips if your adult children are living at home.
1. Agree on their contributions
Firstly, when your adult child moves in, it could be worth sitting down as a family to discuss the household budget and agree on your son or daughter’s contributions.
For example, will they pay a portion of the mortgage or rent, or will they put money towards utilities or food expenses each month?
If they have recently moved back into the family home because they lost their job or separated from their partner, their finances may be tight. So, consider their current financial situation and agree a fair amount for them to contribute.
Often, parents will charge much less than it would cost to live alone. Indeed, a recent report by IFA Magazine revealed that, of those parents who asked for a contribution from their adult children, the average contribution was £25.55 a week.
This compares favourably to the average rental cost for a one-bedroom flat outside of a UK city centre, which is around £179 per week.
Agreeing on their level of contribution will allow you to budget the household’s finances more effectively.
2. Keep working towards your own financial goals
It may be tempting to put money towards your child’s expenditure to help them out financially when they’re living at home.
If so, you wouldn’t be alone. According to a recent survey by Aldermore, 29% of parents revealed they had dipped into their own long-term savings pot to provide financial support for their grown-up children.
However, it is also crucial you keep working towards your own financial goals. For instance, your future retirement plans may be reliant upon any pension contributions you’re making now or any surplus cash you’re putting into long-term savings.
In fact, it could be worth setting limits on the financial assistance you’re willing to provide. Working with a financial planner could be of benefit here, as we can help you understand just how much monetary support you could provide without it affecting your financial plan.
If your adult child requires a substantial amount of money, consider loaning them the funds and ask them to pay you back over time.
3. Help your child identify and work towards their own financial goals
There are a variety of reasons why your adult child might have moved back home. For example, they could have lost their job or separated from a partner, or they could be a recent university graduate needing a place to live while they seek a first job.
Talk to them about their reasons for moving back home and then help them identify their financial goals. Once you have done that, help them develop a realistic plan for getting there.
As a result, you’ll know exactly what they’re working towards and be able to help them stick to their plan. Plus, you’ll know how much financial help you might need to provide.
Working with a financial planner could help
If your children have moved back home and you want to establish how this will affect your financial plan, speak to a professional financial planner.
At Stonegate, our experienced financial planners can help you identify your financial goals and how much you will need to achieve them, and help you understand how your children living at home could affect your plans.
So speak to us today. Please email admin@stonegatewealth.co.uk or call 01785 876222.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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