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Should you let your adult children live at home rent-free?

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Barry Choi

October 28, 2020
Saving strategies
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I have a confession – until about a week before my wedding day, I was still living at home. Although culture certainly played a small role in that decision, it’s not like I was in any rush to move out. My parents encouraged me to stay at home as there was no rent to pay, and meals would be prepared for me. They knew this would allow me to save more money, which I did.

The thought of having their adult children living at home is mortifying for some parents. However, with the high cost of living in several large Canadian cities and the current economic situation, it’s becoming more common and the stigma of living at home in your 20’s or 30’s is mostly gone.

One of the first things to address if your adult kids will be living at home is the question of charging them rent. This decision is more complicated than it sounds since every situation is different so before deciding whether or not to charge for rent, consider the following.

 

What’s their current situation?

Every child and family is different, so the decision to charge rent or not should be based on personal factors. If your child is a recent grad and has massive student debt, letting them stay home rent-free would help them deal with that debt.

If you’re located in a high cost of living city, I’m sure your kids would also appreciate the option to live at home. It would probably be worth encouraging them to stay, so they wouldn’t have to dedicate a huge percent of their income on rent.

 

Make them pay

Some parents believe that letting their children live at home rent-free does them more harm than good. They assume that by charging them rent, they’ll be forcing them to live in real-world conditions.

I can understand this logic. By charging your kids’ rent, you’re teaching them to be financially responsible. You’re showing them that shelter comes at a cost and that it is necessary to create a budget and stick to it.

For instance, if they’re making $2,000 a month and you’re charging them $500 a month in rent, that’s $1,500 they have left to live on. Sure, they likely won’t be paying for other regular expenses such as groceries, utilities, and home maintenance, but it’s still an excellent way to get them to live within a budget.

Charging your kids rent may also be a necessity to help pay for the household expenses. You should feel no guilt over this as everyone in the home benefits.

 

It’s not a free pass

Even though my parents didn’t charge me rent, it certainly wasn’t a free pass. I took care of the internet/cell phone bills, helped pay for groceries, and paid for myself whenever we travelled. I may have been living at home, but I was definitely self-sufficient.

Although it annoyed me at times, my parents always reminded me that they allowed me to live at home so I could save my money. I understood the position I was in and banked as much as I possibly could. Don’t get me wrong, I bought things I didn’t need such as DVDs and toys, but I still had an incredible savings rate.

The reality is that my parents’ decision to let me stay at home rent-free allowed me to save a large down payment. Without their help, I would have likely had to have taken a much larger mortgage.

 

It’s not a competition

Having your adult kids live at home doesn’t mean you failed as a parent. Others may judge you or brag about how their kids have moved on, but that should have no relevance in your decision making.

The same thinking should apply to your decision to charge rent or not. Who cares what other parents are doing or how they may perceive your choices. In the end, it’s up to you to decide what’s best for you and your children.

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Barry Choi - Author bio

Barry Choi is a personal finance and travel expert who makes frequent media appearances in Canada. You can follow him on his personal site at moneywehave.com or you can reach out to him on Twitter: @barrychoi