The best way to grow may be to stand on your own two financial feet.
- As of 2022, a record number of adult children are living at home with their parents.
- The number of young people living at home has led to a boom in luxury spending.
- Experts agree that adult children should pay the rent.
In 2022, a record number of young people aged 18 to 29 were living with their parents. This is his highest level since 1940. These so-called “boomerang kids” are either at home or coming home for a variety of reasons.
Some stay with their moms and dads to save money to buy a house, according to financial planning firm Prudential. Others want to pursue higher education or simply enter the job market later.
“Many parents need to make sure their kids are on their feet and ready to take on the world around them,” said Susan Somersill-Johnson, chief marketing officer at Prudential. I’ll do whatever it takes… an officer.”For many families, this could dramatically change their retirement plans.”
If you have adult children in your household, you may be wondering what to expect from them. Should you charge them for rent? This is what one financial expert has to say.
Former Wall Street trader and internet superstar Vivian Tu goes by the handle YourRichBFF. Tu offers her financial advice through her website and her many social media channels.When grappling with the problem of an adult child paying rent to live with her parents, Tu leaves no doubt as to where she stands on this subject: her parents. should do it I will charge the rent. Here is Tu’s reasoning:
- Young people living at home have more disposable income that is not used responsibly. Mr Tu points to the fact that these young people are driving a luxury consumption boom. A record number of adults living at home is fueling a boom in luxury goods in the US and UK, according to financial services firm Morgan Stanley.
- Of these luxuries, Tu said:
- Having adult children at home makes life difficult for parents who rely on pensions, 401(k)s, or savings. After all, they’re adding to their parents’ utility and grocery bills.
- Adult children should pay rent even if their parents don’t need the money. She suggests that financially secure parents collect the rent and deposit it into a savings account for their children. “Ideally, this will allow your child to get out of the nest on their own feet and pay their own rent sooner or later.
Tu is not alone
Tu isn’t the only financial guru to suggest that grown-up children living at home pay rent. According to SmartCapitalMind, financial experts agree that parents should charge rent to adult children who live in their home or another property owned by the parent. Financial advisors have seen cases where young people have not learned to take their rent obligations seriously and end up in debt.
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Young people who understand that rent and living expenses need to be prioritized are less likely to fall short of paying for housing later.
As psychologist Dr. Henry Cloud once said:
If what Dr. Cloud said is true, the kindest thing you can do for your grown-up children is to get them to pay the rent.