With Gen Y staying at home well into their 20s, it's proving expensive for the parents paying the bills.
The expression ''you have to be cruel to be kind'' could not be more appropriate than for the growing number of ''kids'' still living at home with their parents long past their teen years.
Since no one who gets a free roof over their head, regular meals, the benefits of housework, utilities, entertainment and possibly a car is going to readily move, you may need to either give them a push or charge them enough so no one loses out.
Parents not taking action to either help kids survive on their own or learn the reality of the cost of living could do more harm than good.
There will be adults without handy financial skills and parents working well into their 70s to make up for the additional expense of having their kids at home.
The kind name for those adults still living at home with their parents is kippers - ''kids in parents' pockets eroding retirement savings''. Other cultures have called them ''parasite singles'' or slops - ''singles living off parents''.
One-quarter of people aged 20 to 34 continue to live in the home of their mostly baby boomer parents, a social researcher with McCrindle Research, Mark McCrindle, says. More boys stay at home than girls.
Of that 25 per cent, it's mostly 20- to 30-year-olds living at home. But about 8 per cent of people in their early 30s are yet to leave the nest.
Housing affordability, the inflated expectations of Generation Y and people marrying later and delaying childbirth helps explain the phenomenon. ''When boomers were young, the main reason a young person moved out of the parental home was to get married,'' McCrindle says. But motivations have changed with the generations. ''For today's twentysomethings, the main reason is to be independent, followed by a relationship.'' Study and employment round out the top-four reasons to leave the nest.
Conversely, financial issues are the most commonly cited reasons for staying at home, along with the convenience or enjoyment of living with parents.
The average house price is 9.3 times the average national wage, compared with 5.8 times 40 years ago, making it that much tougher for home ownership to happen in the same way it did for Gen Y's baby-boomer parents.
''Having spent many years in their parents' well-established homes, Generation Y has grown accustomed to a high standard of accommodation and is now demanding well-located housing that is also spacious and affordable,'' McCrindle says.
''Many of them are expecting to start their economic life in the manner in which they've seen their parents finish theirs.''
An adviser with mortgage broker Smartline, Kim Wight, agrees. ''The perception is that it is difficult for kids to get ahead but the kids also have to realise that they are never going to have what mum and dad had [straight away], because they worked all their lives for it,'' Wight says.
She also believes times have changed and a lot of parents don't want their kids to leave home.
Parents are also assisting their kids with the purchase of an investment property in an area in which they don't actually want to live. The rent helps pay the mortgage and they get to save by living in a home and area in which they do want to live.
Another way parents are ''helping'' is by allowing grown-up children to build on their land. ''I've seen the kids take on the responsibility of a complete knockdown to rebuild a dual occupancy or duplex, where the parents get a new home, the kids get a new home. When their kids come along, they have built-in babysitters,'' she says.
This theory that times have changed and members of Generation Y are happy to take everything they can get chimes with demographer and KPMG partner Bernard Salt.
Generation Y likes to take and the baby boomers like to give because it makes them feel good about themselves, Salt says.
Not only are baby-boomer parents more ''with it'' than their parents, so their kids want to stay at home longer.
As long as boomers bring in the money and provide the care, thereby inducing others to rely on them, the boomers remain young, vital and loved, Salt says.
It's the kids from middle-income families who are more likely to ''co-reside'' while they go to university, while kids from upper-income families tend to leave home to pursue their education - with financial help from their parents, a professor of economics at the Melbourne Institute of Applied Economic and Social Research, Deborah Cobb-Clark, says.
Recent research found that kids growing up in disadvantaged families left home earlier but without the same financial assistance, Cobb-Clark says.
''Part of what is driving the trend towards staying home is the financial necessity while finishing their education or getting into the employment market. It is less expensive for parents to have someone stay at home longer than to pay their rent or mortgage,'' she says.
McCrindle says half of the Australians aged 25 to 29 who live in the parental home have moved out and then returned. Most last less than two years before moving back and 20 per cent last less than one year. Sixteen per cent last more than four years before returning home.
''Australians in their 20s have made living with their parents work. Less than 1 per cent cite family conflict as an issue that has caused them to leave home. And parents today are welcoming their adult children back. The boomers are too young to be empty nesters and, despite their complaints, most appreciate having the young ones around,'' McCrindle says.
Many Gen Xs and Ys are returning to the parental home with their own young children in tow, giving rise to the sandwich generation.
''Baby boomers sandwiched between the need to care for their dependent children and the responsibility of caring for their older parents arises from the combined trends of delayed childbirth, the delayed financial independence of children and the increasing life expectancy of the older generation,'' McCrindle says.
While the multigenerational household may simply be a return to what was the norm a century ago, it is a vastly different world we live in. To make it work, both parents and the adult children need clear expectations, agreement on how long the stay will be, what the household rules are and cost sharing.
The result is parents end up working longer than they originally anticipated.
''Even for those who like having their kids home for longer, it gets to a point where it is not doing the kids or themselves any favours,'' Bell says.
Her advice is to charge the kids board and actually take the money so they learn some budgeting skills.
''Even if you put the money aside and give it back to them later as a deposit towards their first home, at least the kids have been learning about money along the way,'' she says.
''A lot of people find taking the money a really tough thing to do but it might actually be a kind thing to do in the long run.''
If one of the main reasons for letting adult children continue to live at home is that it gives them a leg-up financially, then make sure it happens, the regional manager of financial services group ipac securities, Brad Lawler, says.
Either teach them how to budget or help them to save by charging board. ''They need to make responsible decisions and why not start in a safe environment? If they have no idea about rent or paying for things and practical real-life experiences when they are at home, at least if they make mistakes when they are at home, it won't be as devastating,'' Lawler says.
If they do blow it once they have gone, you will still be there for them - but don't make it too easy, he says. ''You are not a bottomless pit. Being there is one thing but there has to be some repercussions and boundaries around that. Putting those boundaries in place at home will help when they move out.''
Lawler says practical experience helps make the real thing less daunting. Parents who do make the decision to have their kids at home longer will need to factor it into their own budget.
''You may find the kids leave home at 30 in a very good state and financially independent, while you are left financially stretched, with very little opportunity to do anything about it,'' Lawler says.
If the average parental expense of raising 2.7 children is $724,950 until age 21 and $1,065,000 into their mid-20s, it is fairly safe to assume the costs keep rising the longer they stay at home.
"It is a financial burden on me. I'm feeding three adults and I have a massive mortgage but I wouldn't have it any other way," she says. "It is part of the contract you sign when you become a mum."
Not that it is all one way.
Lee, who chose to buy a comfortable home that would accommodate her boys and their dog well into adulthood, expects them to help around the house and pay their way where they can.
"The deal is that when they have a full-time job, they pay board and as long as they are saving their money and not wasting it, I'm happy to help out," Lee says.
Adam, a teacher, pays $100 a week board. Sam is in his final year at university and hopes to get a job.
"Neither of them is averse to picking up a vacuum cleaner, they both know how to iron a shirt and I've taught them how to cook a few basic meals," Lee says.
"I want to make them independent young men but I also have a special relationship with my sons and for that reason, we choose to live together. After what we have been through, we are in the best place we have been in our lives," she says.
The kind name for those adults still living at home with their parents is kippers - ''kids in parents' pockets eroding retirement savings''. Other cultures have called them ''parasite singles'' or slops - ''singles living off parents''.
One-quarter of people aged 20 to 34 continue to live in the home of their mostly baby boomer parents, a social researcher with McCrindle Research, Mark McCrindle, says. More boys stay at home than girls.
Of that 25 per cent, it's mostly 20- to 30-year-olds living at home. But about 8 per cent of people in their early 30s are yet to leave the nest.
Housing affordability, the inflated expectations of Generation Y and people marrying later and delaying childbirth helps explain the phenomenon. ''When boomers were young, the main reason a young person moved out of the parental home was to get married,'' McCrindle says. But motivations have changed with the generations. ''For today's twentysomethings, the main reason is to be independent, followed by a relationship.'' Study and employment round out the top-four reasons to leave the nest.
Conversely, financial issues are the most commonly cited reasons for staying at home, along with the convenience or enjoyment of living with parents.
The average house price is 9.3 times the average national wage, compared with 5.8 times 40 years ago, making it that much tougher for home ownership to happen in the same way it did for Gen Y's baby-boomer parents.
''Having spent many years in their parents' well-established homes, Generation Y has grown accustomed to a high standard of accommodation and is now demanding well-located housing that is also spacious and affordable,'' McCrindle says.
''Many of them are expecting to start their economic life in the manner in which they've seen their parents finish theirs.''
An adviser with mortgage broker Smartline, Kim Wight, agrees. ''The perception is that it is difficult for kids to get ahead but the kids also have to realise that they are never going to have what mum and dad had [straight away], because they worked all their lives for it,'' Wight says.
She also believes times have changed and a lot of parents don't want their kids to leave home.
The 21st-century family
Wight says she has had several clients returning to borrow for renovations to increase the floor area of their properties to build parent retreats, separate entrances and additional living areas to accommodate adult kids.Parents are also assisting their kids with the purchase of an investment property in an area in which they don't actually want to live. The rent helps pay the mortgage and they get to save by living in a home and area in which they do want to live.
Another way parents are ''helping'' is by allowing grown-up children to build on their land. ''I've seen the kids take on the responsibility of a complete knockdown to rebuild a dual occupancy or duplex, where the parents get a new home, the kids get a new home. When their kids come along, they have built-in babysitters,'' she says.
This theory that times have changed and members of Generation Y are happy to take everything they can get chimes with demographer and KPMG partner Bernard Salt.
Generation Y likes to take and the baby boomers like to give because it makes them feel good about themselves, Salt says.
Not only are baby-boomer parents more ''with it'' than their parents, so their kids want to stay at home longer.
As long as boomers bring in the money and provide the care, thereby inducing others to rely on them, the boomers remain young, vital and loved, Salt says.
It's the kids from middle-income families who are more likely to ''co-reside'' while they go to university, while kids from upper-income families tend to leave home to pursue their education - with financial help from their parents, a professor of economics at the Melbourne Institute of Applied Economic and Social Research, Deborah Cobb-Clark, says.
Recent research found that kids growing up in disadvantaged families left home earlier but without the same financial assistance, Cobb-Clark says.
''Part of what is driving the trend towards staying home is the financial necessity while finishing their education or getting into the employment market. It is less expensive for parents to have someone stay at home longer than to pay their rent or mortgage,'' she says.
McCrindle says half of the Australians aged 25 to 29 who live in the parental home have moved out and then returned. Most last less than two years before moving back and 20 per cent last less than one year. Sixteen per cent last more than four years before returning home.
''Australians in their 20s have made living with their parents work. Less than 1 per cent cite family conflict as an issue that has caused them to leave home. And parents today are welcoming their adult children back. The boomers are too young to be empty nesters and, despite their complaints, most appreciate having the young ones around,'' McCrindle says.
Many Gen Xs and Ys are returning to the parental home with their own young children in tow, giving rise to the sandwich generation.
''Baby boomers sandwiched between the need to care for their dependent children and the responsibility of caring for their older parents arises from the combined trends of delayed childbirth, the delayed financial independence of children and the increasing life expectancy of the older generation,'' McCrindle says.
While the multigenerational household may simply be a return to what was the norm a century ago, it is a vastly different world we live in. To make it work, both parents and the adult children need clear expectations, agreement on how long the stay will be, what the household rules are and cost sharing.
Of love and other financial catastrophes
The biggest risk of kids staying at home is that they become a financial burden. ''A lot of kids do end up being a drain on their parents for longer than they expected, which affects their own financial independence,'' a principal of Summerhill Financial Services, Caroline Bell, says.The result is parents end up working longer than they originally anticipated.
''Even for those who like having their kids home for longer, it gets to a point where it is not doing the kids or themselves any favours,'' Bell says.
Her advice is to charge the kids board and actually take the money so they learn some budgeting skills.
''Even if you put the money aside and give it back to them later as a deposit towards their first home, at least the kids have been learning about money along the way,'' she says.
''A lot of people find taking the money a really tough thing to do but it might actually be a kind thing to do in the long run.''
If one of the main reasons for letting adult children continue to live at home is that it gives them a leg-up financially, then make sure it happens, the regional manager of financial services group ipac securities, Brad Lawler, says.
Either teach them how to budget or help them to save by charging board. ''They need to make responsible decisions and why not start in a safe environment? If they have no idea about rent or paying for things and practical real-life experiences when they are at home, at least if they make mistakes when they are at home, it won't be as devastating,'' Lawler says.
If they do blow it once they have gone, you will still be there for them - but don't make it too easy, he says. ''You are not a bottomless pit. Being there is one thing but there has to be some repercussions and boundaries around that. Putting those boundaries in place at home will help when they move out.''
Lawler says practical experience helps make the real thing less daunting. Parents who do make the decision to have their kids at home longer will need to factor it into their own budget.
''You may find the kids leave home at 30 in a very good state and financially independent, while you are left financially stretched, with very little opportunity to do anything about it,'' Lawler says.
If the average parental expense of raising 2.7 children is $724,950 until age 21 and $1,065,000 into their mid-20s, it is fairly safe to assume the costs keep rising the longer they stay at home.
Sticking together in tough times
THE need for some stability following a traumatic change in their family circumstances has brothers Adam, 25, and Sam, 22, living at home with their mother, Lee Willis — and that's just the way she likes it."It is a financial burden on me. I'm feeding three adults and I have a massive mortgage but I wouldn't have it any other way," she says. "It is part of the contract you sign when you become a mum."
Not that it is all one way.
Lee, who chose to buy a comfortable home that would accommodate her boys and their dog well into adulthood, expects them to help around the house and pay their way where they can.
"The deal is that when they have a full-time job, they pay board and as long as they are saving their money and not wasting it, I'm happy to help out," Lee says.
Adam, a teacher, pays $100 a week board. Sam is in his final year at university and hopes to get a job.
"Neither of them is averse to picking up a vacuum cleaner, they both know how to iron a shirt and I've taught them how to cook a few basic meals," Lee says.
"I want to make them independent young men but I also have a special relationship with my sons and for that reason, we choose to live together. After what we have been through, we are in the best place we have been in our lives," she says.
Source http://www.smh.com.au/
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