Best thing you can do for your millennial kids….

Posted Friday, May 23rd, 2014. Filed Under Voices of wisdom

I read this amazing and inspiring article about the fact that despite the tough times in the market for millennials, the large student debt upon graduation and the fact that many millennial kids are living at home because they cannot afford to move out… despite all this the best thing that you can do for your millennial children who have graduated and are ready to enter the market is to either set up a fee that they will contribute to the home ($500/mo) or encourage them to move out within a certain time frame.

By establishing a set fee gives your child accountability and responsibility to manage their money and save. This money can be collected and saved for a future purchase of a home or given to them when they move out. There is nothing like having ‘newly found’ money available to cover the cost of moving, buying new furniture or a first/last month rent cheque.

In the Financial Post article No job and no money? The perfect time to move out there is a sentiment by those interviewed that the best thing they can do for their own ability and self-worth is to move out on their own and not return home like so many of their millennial counterparts. One young woman tells of how her parents desperately wanted her to move back home from the apartment she lived it while at school citing perks like a full cable package, free laundry and a fridge full of proper food.

She chose no but if she did she would be in good company – Statistics Canada’s General Social Survey reported that more than 51% of Gen Y aged 20-29 lived at home with their parents in 2010. This young woman of 23 said that her choice to move out was the single best move she every made for her bank account and career.

Barbara Ray’s experience brought her to co-author the book Not Quite Adults. She says, “Working and living on your own is a great way to build confidence because it’s a struggle and you maybe don’t think you can do it.” This Gen Y herself has researched her counterparts to understand the slow-as-snails move to adulthood. She notes moving out forced her to make good decisions, pay rent and other utilities, food, etc. and be responsible. It’s not glamourous but necessary.

The gift is… moving out allowed her to develop grit, hunger, drive and determination — traits the new economy require, but that, as part of generation raised in ease, many do not sufficiently possess.

The parents of the millennials have tried to cushion their kids from life and the world and often to their detriment. Boomer, middle-class parents continue to try and cushion their adult children by allowing them to stay at home rent-free. Kay says, “But comfort, like a plush couch is hard to uncurl out of, and makes one lazy.”

Those that chose to remain in their childhood bedrooms are doing themselves a disservice – no matter the excuses they give. Even if they have student loans. (Kays’ opinion).

Bridget Casey, a 28-year-old financial blogger from “Money After Graduation” also doesn’t buy this excuse. She graduated with $21,000 of debt, which she paid off in under two years while living entirely on her own. She says, “I think if I lived with my parents, there would have been the temptation to spend more money on myself and not necessarily pay down the debt aggressively, because there is no incentive. I had incentive to pay down my debt because once that was done, that would become my disposable income.”

Kids who live at home rent-free are not learning to save and be self-sufficient. These are life skills you need. Unless as parents you are prepared to continue to support your child throughout their life then help them now to become responsible and accountable.

One of the excuses that millennials state is they don’t move out because there is no job and no money. But the best way, Casey claims, to obtain a job and money is to move out. She says she has friends who are living at home and who for years have been unable to find jobs. Why? Because they’re not trying to find jobs, they’re trying to find fulfilling careers.

In the book Ms. Ray talks about the fact that “Clearly what [young adults] aspire to they want that first job to be the first job on a really clear path. They’re less willing to take a risk and start off on an unrelated job – in an unrelated field or lower down the totem pole than they’d have hoped.”

These kids have the luxury of being picky because they have no real financial responsibility. All their basic needs have been met. There is also no incentive so moving out creates the incentive — cart before the horse… maybe. But maybe that’s exactly what your child might need.

One example of a woman, Tiffany Bloye, who began working in a retail job because that is all she could find and then progressed to work in the back office and now four years later, she’s an allocation analyst at Joe Fresh.

One option is to relocate to receive the higher paying job and work within your field. In the article You’ve graduated now where to live and work it talks about the fact that many of the kids graduating had to make a choice to initially relocate in order to earn the higher salaries they needed/wanted for their lifestyle and to pay off the large debts accumulated in their post-secondary education or stay home where the competition can be more fierce and jobs less plenty.

In the article one woman, Karen Larkin, graduated in 2010 with a bachelor of commerce from University of Guelph. She began applying for entry-level jobs with $40,000 starting salary. The jobs she was applying for were not really of interest but she needed to find a job. Just before graduating she did a budget and after allotting $700/mo for rent in downtown Toronto (I am assuming she’d be living with someone) and her student loan she was left with only $20 of disposable income. She decided to make a drastic change and moved to Nunavut where she joined a small translation company for $73,000/year.

If your children are graduating here are some questions for you to ask or have them think about:

1. Should you consider a job beyond your local borders or stay a home?
2. Are you willing to jump start your career by relocating and increasing your earning power?

While money may be the motivator what inspired Karen to move was the fact that she was able to use her degree and apply the knowledge learned. This was here driving force to relocate.

A new Ipsos Reid survey for the Canadian Employee Relocation Council suggests fewer than half of Canadians are willing move for employment opportunities. The survey asked 2000 Canadians whether they’d move either within their provinces or to other parts of the country for a job. Only 10% or respondents indicated that an eagerness to move, while a third said they could be persuaded for the right job and the right incentives.

What makes millennials less likely to move? Millennials are a generation of kids who value family and close connections. The great thing is that with technology you can stay in touch and it doesn’t have to be a life long choice. It can be a great kick-start to your life and as parents we might want to consider encouraging our children to do so.

In the end it is up to each individual millennial to choose to live home or move out. If your child chooses to live home you can still teach your child to apply life skills that force them to be accountable and responsible for their choices and actions. Help them do a cost-benefit analysis for their situation. Help them to assess their goals and priorities and to make a pros and cons list of what’s important, what first needs to be focussed on and addressed. Staying at home does not negate your child’s responsibility to pay down their debt and/or save funds for when they do move out. The parent/child can establish ‘rent’ payment options that is clearly understood by both parties. This money can be given back to them when they purchase a home or move out.

Most important before making any decisions your child needs to create a budget to understand their financial responsibilities – payment of loan schedule, expenses (food, entertainment, bus costs, etc.). Maybe their first job needs to be in a smaller community where the cost of living is not so high. Look to see which provinces have the most opportunity especially in your field.

In the end… let’s choose to give our children the life skills that will make them successful in their lives. You were given this gift by your parents so continue to pass it down. Don’t think you are not a good parent because you are forcing your child to be accountable and responsible. Contrary, look at it as though you are being a good parent giving your kids the life skills so they can succeed as interdependent thriving contributors to society — which they are part of.

I want to wish everyone a wonderful weekend. In the US enjoy your long weekend.

All my love,


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