Have you ever had a moment as an adult where you’ve seriously considered moving back in with your parents? This could have been because of a job loss, or a break-up, or because you just wanted to get serious about paying off debt or saving money. Or maybe you’ve never jumped ship to live on your own. With the increasing costs of renting or buying a home, it’s becoming more and more common for millennials to live with their parents. According to US data, 15% of 25- to 35-year-olds were living with their parents in 2016. That is an increase of 3% since 2010 and a significantly higher proportion of any other previous generation at the same age.
While this has been a fact of life for many of my cohorts, it was never the case for me. I moved out when I was 21 and have never moved back home. That’s in no small part due to certain privileges I had. My parents paid for my university tuition, which meant I didn’t graduate with a ton of student loan debt. For many people, that’s just not an option and repaying those loans decreases the income you have available to move out on your own. Honestly, I’m happy that I moved out when I did because it made me grow up faster and be more responsible, but part of me wishes I took advantage of the free rent while I had the chance. Further down this post, I run some actual numbers, and they make a strong case for living with your parents.
At this point, I can’t imagine what it would take for me to move back home. Desperate times call for desperate measures, and for me, moving back in with my parents would be the ultimate in desperation. Now don’t get wrong, my parents are great, wonderful even, but traipsing back to my childhood home would be the last resort for me. But why? It’s a nice home, in a nice neighbourhood (but the suburbs), my mom would cook for me, and they likely wouldn’t even charge me rent (at least temporarily). The problem is my over-stated sense of independence. I cannot go back to the ‘where are you going’, ‘what are you doing’, ‘who are you seeing’ questions that will bring back a flood of high-school memories.
Sidenote…I talk about myself being this uber-independent woman, but I actually suck by myself. If the bf goes out of town for a few days, I’m basically a lost puppy who only eats cereal and watches re-runs of Grey’s Anatomy. It’s actually pathetic, and I’m really not sure why I just admitted it. I might not post net-worth reports on this here blog, but you guys get full disclosure on the way more embarrassing things.
If I think about it from my parents perspective, I can’t imagine they really want me back under the same roof either. My ego likes to think they would be in heaven if I moved back home, but that’s unlikely. CIBC actually did a study on this, and they found that 65% percent of parents would rather give their adult children a financial gift instead of having them move back home. How about that for busting our millennial bubble. It makes sense though; if I flash forward 30 years, I can’t imagine I’d be too pumped about having my 30-year-old child crashing the nest.
But the savings factor…
Let’s say your parents would allow you to move back home and charge you no rent, or substantially less rent than anywhere else. That is a huge advantage when it comes to your finances. For most of us, paying for a place to live (rent or a mortgage) is the biggest money suck in our budget. Our house related expenses break down as follows:
Property Taxes $254
Home Insurance $95
Natural Gas $150
That would be an extra $1,982 we (as a couple) would have in our budget EVERY SINGLE MONTH if we moved in with my parents. That’s $23,784 in just one year. On second thought, this is an amazing idea. I’ve never actually run those numbers before, and that is substantially higher than I thought it would be. Those millennials who are still living with their parents are the real geniuses here! Ok not really, only in my ‘wannabe a rich person’ dreams. At this point in my life, I value my independence too much, even if it costs me $23,784 a year.
The Other Side
Housing related expenses aren’t all bad. Even though a mortgage is a substantial part of your budget, the hope is that you are also building equity and increasing your net worth. In our case, our home has gone up in value almost 25% since we moved in 7 years ago. Great if we were to sell our place (we’re not), but not so great when it comes with a similar increase in property taxes. That combined with paying down our mortgage means we have built up quite a bit of equity from owning a home and not living with parents. The numbers still favour living at home, but it’s not nearly as substantial.
Another factor for would be in transportation costs. We recently sold our second car and have been living as a one car family for a few months now, and that would no longer be possible at my parents’ place. As I said, they live out in the suburbs, and we both work in the city, with very different schedules. That would mean both of us commuting every day, and instead of spending maybe $40 a month on gas we’d be at almost $80 a week. This wouldn’t be the case for everyone, maybe your parents actually live more conveniently than you, but dealing with that commute every day would soon make me crazy.
It’s Not All About the Money
If you’ve read the blog before you’ll know that I’m not going to win any frugal living battles. I understand the importance of saving for the future (and I do), but I also know that I want to live for the now. Moving back home with my parents would mean that I would hit my savings goals and retire a lot earlier, but it would also mean a big decrease in my right now happiness level. It’s never been my goal to get out of the workplace as soon as I can. There are certain luxuries I’m just not willing to give up to make that happen…my lattes, my pets, eating out, living on my own, etc. All of these things bring me enough joy to make working longer not such a bad thing.
Let’s chat…would you consider moving back in with your parents if it meant you could retire early or would you avoid it at all costs? Do you think your parents would let you crash the nest?