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Moving out of your parent’s house was once seen as a rite of passage to entering the real world, one of the first early steps into full-fledged adulthood. Yet, with Canada’s home prices expected to continue climbing, some prospective first-time home buyers have traded in total independence to move back in with their parents in order to boost their savings for their future home.
While adult children living with their parents has been considered the norm in some cultures for decades, the number of adult children returning home across Canada has sharply increased. In 2017, Statistics Canada reported that 1.9 million Canadians between the ages of 25 to 64 lived with a parent, accounting for nine percent of Canada’s adult population. This is more than double from a decade prior, when only 900,000 adults lived at home. At least 462,400 Canadians in 2017 lived on their own at some point, and later moved back home.
Returning to your childhood bedroom after a taste of independence can be a difficult pill to swallow, says Shannon Stach, a registered social worker and psychotherapist.
“In our North American culture, we’re very pushy of being independant. I think a lot of independence grows from living on our own,” she says. “Many of us go out to college or university after our secondary education, which is a majority of the norm of what people experience… most of us find it very difficult to go back in with our parents after the fact that we’ve lived on our own.”
While there may be obvious drawbacks of cohabiting with parents again — a lack of privacy, conforming to household expectations, social stigmas — those who live at home are set to substantially increase their savings if they remain disciplined.
“As long as you have an idea about when you’re going to move out and you put that money aside automatically and treat it as money that you don’t spend, that’s the most effective way to do it,” says Sean Cooper, a personal finance journalist and author of Burn Your Mortgage.
If you’re debating moving back in with the ‘rents or rooming with the in-laws to save for homeownership, here’s a few pointers from Cooper and Stach on how to make the most out of your living situation.
All the feels
Money and family can be a tricky combo to manage, whether it be using the Bank of Mom and Dad, or saving and living under the same roof. No matter the arrangement, Stach says that fostering good communication of emotions and boundaries between all parties is a must.
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“I think that’s something that everyone needs to be mindful of, that it takes a lot of communication,” she says. “If you don’t have good communication between you and your partner, or feel like you can’t communicate with the people that you’re living with, there’s going to be struggles.”
Stach has integrated good family communication into her own life — she’s spent the last ten months living in her future in-laws basement suite while she and her fiancé search for a home in Toronto. Stach explains that while she has a positive and supportive relationship with her to-be in-laws, not every adult child or couple has this advantage. It can be difficult to be completely upfront and honest with feelings, especially to in-laws, or if one or more of the parties are not good communicators. Despite these challenges, Stach says communication needs to be clearly established from the get-go.
“For my job, I’m often seeing many clients in a day and after I come home after the day, I’m very exhausted,” she says. “I’ve said to [my partner’s] parents when I moved in that if I come in the door and I say, ‘Hi’ and I don’t want to stay and chat, it’s not because I don’t want to chat with you guys, it’s because I’m exhausted from my day.”
To make the most out of living at home, Cooper stresses the need for having a grown-up conversation between parents and adult children. Discussing boundaries before the move-in will help Millennial children stay focused on their savings, limit conflict and lend some control to the parents.
“I think parents really need to be setting ground rules and saying, ‘This is only temporary,’ and being upfront about why they’re allowing their adult child to move home, and to come up with a partnership and agree why you’re able to move back home,” says Cooper.
Stamp out mooching
Moving back in with your parents might save you money, but it shouldn’t become a free ride. Whether it be assisting around the house or paying a small amount of rent, Stach explains that setting living expectations will help to maintain balance in the house.
“For instance, we had a conversation with his parents about what they wanted us to help with,” says Stach, speaking about her own living arrangements with her future in-laws. “They have a very large garden in their backyard, and so part of our duties is to help them clean up this garden in the backyard.”
Financial expectations are crucial too. No one likes a mooch, especially if one is living with you. Cooper explains that living with your parents is a privilege, and this generosity shouldn’t be scoffed at.
“First and foremost, it’s important to recognize this as an opportunity that not everybody has. It’s about having the right mindset,” he says. “If you’re just treating it as not an opportunity and basically taking extra money and spending it, then you’re not going to be any further ahead. You have to recognize that this is an opportunity that a lot of Millennials don’t have.”
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If you’re moving back home, it’s possible that your parents will want to guarantee that you’re living in their spare bedroom for a reason — that you’re actually putting money away. This means being open about what you’re saving each month. If you’re not great with saving, Cooper recommends working with your parents to develop saving goals. One method of doing this is to automatically transfer a percentage of your pay into a savings account so the work is done for you. Another strategy is for parents to charge ‘rent’ as a savings exercise, then gift the payments back once the adult child moves out.
“Don’t let them know that in advance, but by doing that, at least you can force them to save and make sure that they’re getting the full benefit of living at home,” says Cooper.
Learning financial responsibility before taking on a mortgage, Cooper says, is a valuable lesson for managing personal finances in the real world. But Stach agrees that financial transparency and expectations with parents should be determined before you live together. If not, it can get awkward.
“Otherwise, you’re going to be in the midst of it,” says Stach. “Your future mother in-law is going to be wanting to look into your bank account and you might not have a good relationship with her at the end of the day.”
Don’t aim too high
Real estate markets are constantly changing; mortgage rates and housing prices are not static. These fluctuations can make it tricky to save on a timeline or move out of a parent’s home by a specific deadline. In Stach’s case, she and her partner planned to live with his parents for up to eight months. Now, having been unable to secure a house, they’ve had to extend their determined move out date to a year.
“You have to be flexible, because the market is ever-changing,” says Stach. “We’ve had our experiences where we lost out on two homes, and now we’re reconfiguring where we want to be and what that looks like for us.”
Photo: Dafne Cholet / Flickr
While it can be frustrating to find the right home within budget, Cooper advises to move out sooner rather than later. As housing prices remain high in big cities, he cautions against setting savings goals too high and advises aspiring homebuyers to keep their plans realistic. Otherwise, it could take you years to save while living at home. Instead, Cooper recommends saving a down payment of 10 percent in hotter markets, and 20 percent for more affordable areas, such as Winnipeg or Saskatoon, in addition to keeping an open mind about the type of home you’ll buy.
“First-time homebuyers can’t expect to go out and buy a detached house right away,” says Cooper. “Just try to be flexible in terms of the property type because you might not being able to get your dream place right away, but you can look at condos and townhouses as good entry ports and get into the market that way.”
To boost your savings further, Cooper also recommends picking up a side hustle for an extra stream of income. Using Uber or completing odd jobs with TaskRabbit a couple nights a week could bring in an extra hundred dollars.
Build a foundation
In any family, there can be conflict, bickering and petty arguments. However, Stach warns that if these events become persistent, it can take a toll on mental health.
If you develop signs of stress and anxiety — sleeplessness, avoidance, fear about returning to the house — or, if conflict develops between you and your partner, it may be time to reconsider the living arrangements. Resentment can fester between couples if living with a parent isn’t working out. Stach says that regular couples counselling can be beneficial to preventing resentment and building a foundation of communication.
“You want to be really careful that you’re making this decision together so that one person isn’t starting to build resentment: ‘You made me do this, I never wanted to do this,’” says Stach. “It has to be a decision that you guys are coming to grips with together.”
When Cooper paid off his entire mortgage within three years, he visualized the day he would become a debt-free homeowner as his motivation to keep to his savings goal. This same visualization and future planning, he says, can help future homebuyers through the tough spots.
“Rather than it being a goal, once it’s more tangible, it can motivate people to work that much harder to achieve the dream of homeownership.”
