Living with adult children

May 21st 2021 | Categories: Money, Family & Relationships | Financial Planning |

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If managed well, multigenerational living can be beneficial to both your adult kids’ financial goals and your relationship with them, that said it’s not without its challenges.i 

What’s behind the shift

Today’s young Australians spend longer in higher education, stay single for longer or choose not to tie the knot at all and start families later than previous generations. They’re also living through a period of sluggish wage growth, high underemployment and youth unemployment and despite recent corrections, a housing market that is inaccessible for many first home buyers.

There are, however, young adults who use living at home as a strategic move, with 28% using it as an opportunity to save for their financial goalsii – like owning a home or planning for a big trip.


Benefits of having a kid at home

Helping kids save for their future isn’t the only benefit of continuing to provide a roof over their head. For many, especially those who boomerang (returning to the nest after a period away), it offers the chance to build a relationship on a level footing. You get to know each other as adults which can be a wonderful thing.

Having adult kids at home can also mean you get help with the domestic duties and maintenance around the house or assistance looking after younger siblings.

When your kids do finally leave the nest and you no longer have helped maintain the house or a need for a big empty space, you might consider downsizing.


Problems can arise

Despite the benefits, in some cases continued cohabitation can become detrimental to the relationship. Common gripes include entitled kids who don’t contribute to costs and chores and overbearing parents who continue to treat their offspring as if they were tantrum-prone toddlers.

Equally worrying is the added cost of having an extra mouth to feed and the associated costs of an extra member in the household. If you are a parent in this situation, make sure the not-so-empty-nest is not derailing your retirement plans. According to a 2018 study, Aussie parents spend a combined $235 million each week on adult children living at home.ii

A Financial Adviser can help you plan for the future, keeping your goals and circumstances front of mind. Contact us today.


Set boundaries early

Communication is key to making co-habitation with adult kids work. This means staying in touch to make sure everyone’s expectations are understood and those boundaries are in place. If your kids are earning, are they paying board? How much are they contributing towards groceries and bills? And what about household labour?

On the parent’s end, there also needs to be some flexibility. Are you happy to have your child’s friends over to socialise? Are partners allowed to stay the night? Rules around curfews that may have been appropriate when they were a teenager may not be relaxed enough to allow your adult child freedom so as not to become resentful.

Both parties need to be aware of each other’s boundaries and expectations early on to set the foundations for a happy domestic life.


Consider Insurance

While it can be great to have family around, it is also a real financial burden. But the alternative is letting them fend for themselves – an idea no parent would be comfortable with.

How does this happen? There are a number of circumstances that could see your otherwise very successful, grounded children left with nowhere to turn. The accidental death of a partner or a long-term illness or disability. Even the loss of a family business or a sustained period of unemployment.

The good news is that there’s a way to ensure these unforeseen circumstances don’t impact your retirement lifestyle. It’s simple – insurance.

Making sure your adult children are adequately insured is the easiest way to take care of them, whilst also safeguarding the retirement lifestyle you’ve worked so hard for.

Learn more about how (and why) to talk to your adult children about insurance.


Shared goals

While your adult kids are at home it’s a great time to make their financial dreams a reality. Frame it as a shared goal, one that you all have a stake in. If both sides are willing and eager to uphold their side of the bargain, it will alleviate tension and make the goal more likely to succeed.

It might look like this: the parents allow their offspring to live with them rent-free, provided the kid puts away 40% of their income towards a house deposit. You can have a system in place to prove this is happening and regularly meet to help make sure everyone is staying on track.

To help your adult children better understand their dreams for the future, try out goal-setting tools.


Not always the right choice

It’s important to acknowledge that cohabitation is not the right choice for all families. If things aren’t panning out well, be honest with each other. Then work together to find alternate living arrangements.

You all tried your best, and it’s just not panning out. To help your children plan for their new life away from the family home, read our article on expenses to consider when moving out of the home.

If it aligns with your circumstances and goals, you may also wish to help your children get their own place by going guarantor on a loan. To explore this option (and more), contact our Banking and Lending team today.

Modern kids are likely to come and go throughout their lives. Treasure the times you have living together while making them as fruitful for both your relationships and finances as possible.


The right advice can make a big difference in your financial future. Why not speak to one of our Advisers today?

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.