Can't find a job? Consider moving back home

When job opportunities are not presenting themselves, moving back in with your parents is an option to help ease any financial burden you may be facing.

 

Today's millenials face a tough road ahead of them thanks to the unfortunate effects of the recession. With the unemployment rate for those aged 15-24 at a whopping 14.7 per cent in Canada, double that of the national rate, more and more young adults are graduating into a tough job market.

 

The lack of jobs coupled with high student debt is a common reason for youth to move back home, but other crises like ending a romantic relationship or living with bad roommates can also influence a return to the nest.
Rob Carrick, an Ottawa-based personal finance columnist for the Globe and Mail newspaper and author of a financial guide for young adults, How Not to Move Back in With Your Parents, says it's the most sensible solution for someone who doesn't have a job.

"Ideally, you won't have to pay rent and you can live pretty much cost free," he says. "It means you don't have to go into debt to pay your day-to-day living costs... It gives you a chance to plot a strategy for moving forward without digging yourself into a worse hole of debt."

Before the move
Christina Newberry, a Vancouver-based author and founder of The Hands-On Guide to Surviving Adult Children Living at Home, says before the move happens, both sides need to sit down and discuss:

1. Why you're moving back home
2. What you plan on doing during your time living at home
3. How long you plan on moving back for
4. Other details about your stay such as rent, computer, car, and TV privileges, curfew, and your significant other

There's a huge sacrifice made when both sides agree to live together again. She suggests putting together a contract that serves as a reference whenever there's a problem.

If you move back home again, it is up to the child to renegotiate the terms, says Carl Pickhardts, a psychologist in Austin, Tex., who specializes in parenting consultation about adolescence.

"There's no fixed schedule for the achievement of full independence, it varies for young person to young person and that is OK," he says.

Should you pay rent?
Newberry moved back home twice, once for eight months after she graduated from university and again for two months after a romantic relationship ended. When Newberry moved back the first time, the family decided she didn't need to pay rent, unless she stayed past a year. But she thinks other young adults should.

"It helps maintain that pattern of having that monthly expense to consider," says Newberry who covered her personal expenses during both times. "It also helps the adult child feel less like they're mooching off of their parents — they're making some contribution to the household."

Carrick says the young adult should offer to pay rent and let their parents decide.

How much is enough for rent? It's impossible to suggest a figure, says Newberry, but the family should put together a budget and calculate the financial impact of the adult child moving back. If the child can't cover the cost, then rent could be a percentage of their income.

If your parents won't let you pay rent, lend a hand with household chores, pay for groceries or utilities and treat your parents to dinner to show your appreciation. Use the money you would have used for rent to pay your debts or put it towards the down payment on a house, Carrick adds.

Plan an exit strategy
Avoid becoming a kidult and use your time wisely, says Newberry.

"Some people get into the mindset that they're going to live with their parents until they land the perfect job," she says. "[Instead] focus on the opportunity to really develop your skills because you don't have the obligation of a huge monthly rent or mortgage payment."

Before moving back home, estimate and negotiate the length of your stay and what you plan to do while living there.

Moving back out
If you just landed a job, congratulations, but don't move out right away, says Carrick. To move out, you'll need first and last months' rent, enough money to cover food, the move and any other expenses. Also, if your workplace has a probation period it's safer to stay at your parents' place until that period is over, he adds.
"When you're moving out, you want it to be a one-way trip. You don't want to put yourself in the position of going back a second time," he says.

 

By Josephine Lim, Bankrate.com, June-14-12