How Not To Move Back In With Your Parents

Rob Carrick is the personal finance columnist for The Globe and Mail, and has been one of Canada’s most trusted and respected financial experts for over 15 years. Carrick’s new book, How Not To Move Back in With Your Parents, hits the shelves today.  This personal finance book is aimed specifically at young adults graduating from university or college and moving into the workforce.

I had a chance to read the book earlier this month and was impressed with the straight-talk and realistic advice from Carrick on the financial challenges and opportunities facing young people today.  Not only is this book a young person’s guide to financial empowerment, it’s a great read for parents as they prepare to send their kids off into the real world.

How Not To Move Back in With Your Parents: About the Book

This book is comprised of nine chapters, each taking a comprehensive look at a financial topic through the eyes of a young person as well as their parents.  Each chapter also includes case study interviews with young adults as they navigate through all life’s financial milestones.

Here are the chapter summaries:

Chapter 1: Affording College or University – Unless your parents are okay with you being loaded down with student debt, they should be paying as much attention to RESPs as to TFSAs and RRSPs.  If your parents can’t swing an RESP, then student loans are your back-stop.  Remember, scholarships are out there.  Borrow if necessary, but pay attention when payback time comes.

Chapter 2: How to Handle Debt, Both in School and Afterward – Resist getting a credit card until you’re confident you can handle it.  Be honest with yourself.  Build your credit rating through careful borrowing.  Be sure to borrow as cheaply as possible.

Chapter 3: You and Your Bank – Take advantage of student banking packages, they often cost nothing.  When you enter the workforce, look for the lowest-cost chequing account and give strong consideration to online banks no fee accounts.  Pay attention to your day-to-day finances to stay in control of your spending.

Chapter 4: Saving, Budgeting and What to Do if You Have to Move Back Home – Clearing away student loan debt is the first step toward good financial health as an adult.  Learn about budgeting to see how much room you have to pay off debt and save.  Be aware of the boomerang effect.  Economic necessity may send young people back to the family home for a while.

Chapter 5: Looking to the Future: RRSPs and TFSAs – It’s never too early to start retirement planning.  Compare RRSPs and TFSAs – there’s no wrong choice, but TFSAs can make more sense for young workers with modest salaries.  Get on a regular savings plan, automatic transfers work best.  Finally, if your company has a pension plan, jump on it as soon as you can.

Chapter 6: Mobility: Or Cars and You – Rethink the car.  The financial commitments of owning a car go far beyond the payments – and all these costs keep rising.  Be a smart buyer and remember the new grad discount that many car companies offer.

Chapter 7: Buying a Home – Renting is okay if you can’t properly afford the full cost of buying and owning a home.  You can pull money out of an RRSP using the Home Buyers Plan, but the TFSA gives you much more flexibility.  Avoid trying for the big score in the stock market and instead use a high interest savings account to save for your down payment.

Chapter 8: Weddings and Kids – Arrange the best wedding you can afford – but avoid going into debt.  Prepare for the arrival of a baby by clearing as much debt as possible.  Mind the cost of daycare, it may be a part of life for many years.  Remember that grandparents can contribute to an RESP account for your new baby.

Chapter 9: Insurance and Wills – Students need to have renters insurance.  Always shop around for your home and car insurance.  And finally, buy term life insurance when you start a family.

Final Thoughts on How Not To Move Back In With Your Parents

Rob Carrick has spent more than a decade talking to people of all ages about money.  Throughout the book, he offers advice from his own pre-expert past – saying he’s learned well from his mistakes so that you don’t have to.  He even admits to moving back in with his parents, briefly.

Carrick takes a realistic look at how tough it is out there for young people these days, and suggests that parents can play a role in getting their kids off to a good financial start in life.  This doesn’t mean parents should be running the financial affairs of their grown-up kids, but they can fill the role of trusted counsellors who have been through similar circumstances.

How Not To Move Back In With Your Parents is a great personal finance manual for young Canadians and is a must read for both young adults and their parents.

Purchase a copy of How Not To Move Back In With Your Parents.

Also, be sure to check-out Rob’s Facebook personal finance community for talk about investing, retirement, real estate, banking and other financial matters.

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  1. JohnC on March 27, 2012 at 7:24 am

    I don’t see anything wrong with moving back in with your parents, temporarily. As long as you help out around the house and pitch in a few bucks for groceries.

    Looks like a great book!

  2. Alex Fernandez on March 27, 2012 at 7:28 am

    I think parents should help their boomerang children but have clear plan and guidelines for how the “boomerangs” will transition out of debt and into a financially stable living arrangement.

    On another note, I think the credit cards make you spend more money even if you pay your balance on time. I think that the rewards that credit cards give you are enticing but in the long run it is simpler to have no credit cards.

    In terms of budgeting, I think that a fixed “cash diet” is good for “eating out” type expenses because all those little expenses add up so fast.

  3. Harold on March 27, 2012 at 7:29 am

    It’s almost a necessity these days – kids get saddled with all kinds of debt after graduating, can’t find a good paying job, and their aren’t many pensions floating around (not that 20-something’s care about a pension, they’re much more concerned with things like “flex-time”).

  4. Jeff on March 27, 2012 at 7:33 am

    It depends, if the kids show that they are financially sound and just need a hand through some tough parts as they get educated and adjusted to working than sure I think any parent would be more than helpful to give a lending hand.

    If you kids are moving back with you because they are lazy, irresponsible with money or simply looking for a free ride, than I think it’s the parents responsibility to not help. In these situations the best thing a parent can do is teach the tough lesson or else your kids will be loafing in your basement until they are 60!

  5. daftster on March 27, 2012 at 7:40 am

    I think it’s ok to move back with your parents, especially with the high cost of living. This way, it would be easier to save and start all over again.

  6. chantl01 on March 27, 2012 at 7:55 am

    I think more kids should consider trying to live at home during university, while working, and avoiding student debt to the greatest extent possible. Then once they’ve graduated and landed a full-time job (or 2 or 3 reasonable part-time gigs), they should put together a budget and move out to someplace they can afford. Parents instilling an understanding that you don’t buy what you can’t afford is key, and from an early age. Hopefully that way all can avoid the boomerang kid phenomenon entirely!

  7. Jeff on March 27, 2012 at 8:03 am

    I think it’s ok to move back in with your parents if you’ve run into financial difficulty (i.e. laid off) but you should attempt plan to the ‘T’ to avoid that situation.

  8. Steve on March 27, 2012 at 9:42 am

    Parents should charge their kids rent if they move back home after school – and not just some paltry amount. It would be nice if the parents can afford to just save that rent money and make a present of it later when their child is ready to move out and purchase a home or some other large item.

  9. J.B @ My University Money on March 27, 2012 at 9:49 am

    I’d say helping them out is a good idea, but not spoon feeding them. If my parents had the funds to clean out my debt I would love it. But I wouldn’t learn anything from it. Having the debt forced me to learn about interest rates and budgeting and not buying whatever I want. Looks to be a great book though!

  10. Modest Money on March 27, 2012 at 9:50 am

    Personally I think parents should avoid letting adult kids move back home. That is just giving them an easy way out and letting them avoid dealing with their mistakes. They have to get used to the real world and accept responsibility. Too often I hear of adult kids taking advantage of those situations and being babied. They are just avoiding growing up.

  11. Liz on March 27, 2012 at 9:53 am

    Should parents help their grownup kids financially? Absolutely – provided they have handled their own finances responsibly, and are able to pass on hard earned lessons to kids willing to learn. Kids come into financial maturity at different ages, and there is nothing wrong with learning to be financially responsible at any age. Everyone is allowed to make mistakes and lets face it, in these turbulent economic times, people need help. This also means that neither side should take advantage of the other – set up the expectations ahead of time – moving back in with mom and dad does not mean you have a built in babysitter, maid or cook. Your kids moving back in does not mean you are entitled to know where they are at all times.If the assistance is a gift, it is freely given with no strings; if a loan, make good on your promises.

  12. Rnld on March 27, 2012 at 10:00 am

    I want to say no, but reality is that in today’s harsh and unforgiving environment it could mean children taking rash actions. Once upon a time every little indiscretion was not recorded and people could start again by moving or changing careers with hope of being successful or at least getting by. I sometimes look at my 9 year old and wonder if he has a real chance without me fighting on his behalf. If he wanted a downpayment or to buy a car I would say no, but if he wanted money to pay for groceries or help to cover his rent (or be kicked out) I’d give in.

  13. Steve @ Grocery Alerts on March 27, 2012 at 10:34 am

    I also don’t see anything wrong with moving back in with your parents. My mom has a house that is 6 times bigger than our condo and it is something we are considering when I plan to go on parental leave.

    My parents have always helped me out when I needed the help but I have always tried to help out the rest of my family when possible.

  14. Boomer on March 27, 2012 at 11:04 am

    In theory I’m not in favour of adult kids moving back in with their parents. In reality, I would do anything I could to help them out and one of my children boomeranged home not once, but twice.
    One thing you have to be aware of is the dynamics of the family relationship. After all, the parent is still the parent and the child is still the child and it’s easy to revert back to old behaviours.
    Even at my advanced age, when I stay with my parents my dad comes up with things like “When are you going to get a decent job?” (meaning one he approves of) and “Why don’t you go back to school? I’ll pay for it.” (Yeah, right Dad!).
    I also have to be careful about sitting on my butt while my mom makes supper, or handing over my laundry for her to wash. The adult becomes the child again without meaning to.

  15. Sally on March 27, 2012 at 11:30 am

    Living with one’s parents to save money to buy your own place or to pay off student loans is advantageous. However, what I see with my friends kids (I had kids very, very late in life so mine are still young) is that they are living at home, paying nothing towards any household expenses and nor are they paying down debt (by their own admission). Instead, they are spend almost all their money on clothes, accessories (all these 20-somethings with Coach purses!), fancy new cars, etc. I think enabling them is allowing them to want a lifestyle which is far more affluent than they will ever enjoy once they have to pay for rent/mortgage, utilities, food, etc.

  16. Maria on March 27, 2012 at 11:47 am

    It depends. Parents should make sure that their son or daughter is experiencing a true need. As long as the parent has not been lavishing their child with monetary gifts throughout their adult life ,rendering them financially dependent , with a warped sense of entitlement or constantly bailing them out of financial messes that their kid has not been appreciative of , then I see no problem helping them out. We all need some help some of the time.

  17. Derek on March 27, 2012 at 12:11 pm

    I have no problem with adult kids moving back home as long as they respect the rules of the house and help with paying rent, doing chores etc. If they are going to be basement slugs and not help out at all (including their own finances), then no. Generations of families living together has been a stable in many countries in the world since humans began living on this planet and there is no reason to stop if all parties get along fine.

  18. Sean Cooper on March 27, 2012 at 9:57 pm

    I believe parents should allow kids 6 months to a year after university to find a full-time job and then they should either move out or start paying rent.

  19. Steve@The Loonie Bin on March 28, 2012 at 5:50 pm

    I think it’s important to always be there for your kids, especially nowadays with the high cost of living.

    It makes more sense to help your kids financially when they need it now (within reason), rather then leave a large sum of money when you pass on that could have been used as a down payment or to pay for university.

  20. Rajib on March 29, 2012 at 1:14 pm

    I moved back into my parents house after being away at university. Then I started a job and moved out. Two years later, I got laid off and moved back in with them again. Those times living with my parents allowed me to save enough for a downpayment for my own place. Since it worked out well for me, I say it’s definitely okay for adult kids to move back in with their parents. As long as it is temporarily…

  21. Jacqui583 on March 30, 2012 at 6:18 am

    It depends on the individual circumstance. I have a 23yo daughter who finished school two years ago. She has been living at home rent free ever since, but is now in the process of buying her first home. I couldn’t be happier for her. I didn’t feel the need to charge her rent as she is very frugal and saved most of her paycheque toward a down payment.

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