The not-so-empty nest: why kids never seem to leave

For this week’s Top Story, we’re looking at the financial costs of boomerang kids on the entire family.

Celebs like Gwyneth Paltrow and Jason Bateman have recently shared how they were deeply grieving when their kids went off to school, echoing the powerful combination of pride and sadness that many parents feel during this transition. Turns out, we should enjoy the nest while it’s empty, because it may not stay that way for long: According to one Ipsos study, following graduation from post-secondary, about four in 10 (36%) will continue to live at home, with 47% staying for two years or longer.

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When Kaye Ross and her partner renovated their Toronto home, they turned their basement into a micro rental unit, imagining renting it out to a student for another income stream. Instead, Ross’s daughter moved in after finishing university. Then her boyfriend joined her. Eight years later, it’s an arrangement that’s working well for all of them: the young couple save money paying about half of what they’d pay a landlord, and they help out Ross when her health is struggling.

Ross and her family are in good company. According to Statistics Canada, one in five people now live in a household made up of parents and their adult children. That’s 7.1 million Canadians, as of the last census. Zoom in on 20-somethings specifically, and the number gets even bigger: 43% of young adults aged 20 to 29 live with at least one parent that year. There are a bunch of reasons kids come back or never leave—going to school, taking care of mental health, dealing with a breakup, making ends meet after a layoff.

But underneath these and other factors sits the same math problem: the average income for Canadians aged 20 to 24 was only $24,420 in 2021, and $38,600 for those aged 25–29. Rent for a one-bedroom apartment, meanwhile, hovers at around $2,000 in Toronto and even higher in Vancouver.

Quite literally, it doesn’t add up.

Help the parents with rent, helping the kids build equity

When Calgary-based financial coach Jolie Viguers’ son was in Grade 12, he spoke often and excitedly about moving out on his own. He started working in the trades, making “great money,” but the idea of giving a massive portion of it away to a landlord started seeming less appealing. Instead, he lives at home, paying just-below-market-value rent to his parents on the first of every month, which they’re setting aside for when he’s ready to buy his first home.

For now, the arrangement works well for them. They operate with common courtesy and communication when it comes to things like buying groceries (“He eats out more often than in,” says Viguers), sharing space and giving each other privacy.

Viguers’ financial-coach side makes sure both of her kids are learning crucial financial skills, like how credit cards work and how to manage their own cell phone bills. She also encourages other parents in the same boat to make sure they’re not putting their own financial goals and budget at risk to support their adult kids: “You have to know how much support you can provide without risking your own lifestyle and your retirement.”

Making living together mutually beneficial

Ross’s daughter and now-husband join them upstairs for dinner about three nights a week, and Ross would be happy with more, but appreciates that they have their own lives. She knows, too, that they’d love to afford their own place, and they’ve managed to save enough to buy some land outside the city. But for now, it’s a pretty great intergenerational setup; one that’s abundantly common in many cultures.

Viguers loves their setup, too: “We do a lot of travelling, so we have a built-in kitty sitter and someone to take care of the house. And having a safe space to cushion and launch is the easiest way for me to support them. It’s okay if it takes some time to do this whole transition. I want it to go smoothly so that they can really leap.”

Setting your financial fence

Living with loved ones sounds easy, but it can come with stressors, too. Daniel Evans, an advice-only financial planner with Money Coaches Canada in Vancouver, often hears of parents putting their adult kids’ needs before their own. “And then it starts eating away at their retirement plans or plans to travel,” he says. “If you have kids at home, there has to be some sort of financial responsibilities and expectations.”

Evans urges his clients to be aware of their “financial fence,” which contains all of their assets. “You’re bound by that fence, so whatever your emotions or your behaviours, your dreams and aspirations, you have to find that balance between what you want to do and what you have.”

He often sits down with the kids of his clients, spending an hour going through their financial basics—income and expenses, household contributions, savings—and encourages parents to be upfront with their kids about their own finances: “This is what we have. This is what we make. This is what we spend. This is what we save. This is our retirement budget.”

Evans flags two areas of concern for parents of adult kids at home. The first is being mindful of the gap that arises when group insurance policies drop off (usually at 18 or 21, or later if they’re a full-time student).

The second arises when one kid receives more support than their siblings, with parents having to ask themselves: “How am I going to equalize that? Or do they understand that there is no equalization and they’re OK with it?”

For those of you dealing with the emotions of kids moving out, think of this next couple of years as a much-deserved break, and not a final divorce. They’ll likely be back.

Read more from this issue of The Get:

1. Does bankruptcy or a consumer proposal ruin your credit in Canada?
2. Chef Mary Berg on how to slash your food bill–and still make a damn-good dinner
3. How to write a Facebook Marketplace listing that actually sells your stuff
4. Is a heat pump worth it? What’s the cost for Canadian homes?