Millennials moving back home were once labelled the boomerang generation, with insinuations that they couldn’t hack it on their own. The large numbers of young people moving home took care of that nonsense. We gradually absorbed the fact that it was the job market and expensive housing that put 20- and even some 30-somethings in this position.
It’s now time to ask what the new normal is for parents supporting their adult kids. Beyond offering room and board where needed, how common is it for parents to help with expenses like mobile phone plans and car insurance? With rent so expensive in big cities, how many parents are helping with that cost?
And then there’s help in getting into the housing market. We know that parents gave more than $10-billion to adult kids for home buying at the height of the housing boom. How common is it now to provide down payment help?
What’s the new normal in helping your kids financially? To help find answers, I put together this anonymous survey for parents with kids aged 21 and older. I’ll report back on the findings later on.
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Rob’s personal finance reading list
Their mortgage payments jumped $2,000 in a year
A homeowner talks about what soaring mortgage costs have done to his family’s finances, even after he and his wife got better jobs with pay increases.
Advice for women on negotiating a raise
Men make more than women on average. Detailed advice here for women on how to approach negotiations for a pay increase.
A master class in ordering at restaurants
I used to think my wife and I had a relatively high tolerance level for food costs at restaurants, but that’s over. I cannot believe how expensive some restaurants are right now. If you’re splurging, check out these suggestions from a pair of food critics on how to read a menu and order well.
The little things people are doing to save money
BuzzFeed asked about the big and little ways people are cutting back on spending as a result of inflation. There were enough responses to this call-out that a follow-up was published.
Q: Why are we not talking about the 30 per cent decrease in house prices as a market crash? From my readings, the housing market crash in the 80s also experienced a 30 per cent decrease in house prices, but it was over a span of a few years, not a few months like we are seeing now. The swiftness of the price drop is truly astounding and worse than the gradual decrease of the 80s. What are your thoughts?
A: My wife and I bought our first house in the early 1990s in Toronto, after the full effect of a traumatic market crash. Many of the homes we looked at were being sold at prices well below the previous sale, which was often in the previous year or two. Mortgage rates were at or near double digits back then and people were choosing not to stay in homes that were plunging in value. I also recall it wasn’t unusual to see houses being sold under power of sale. I haven’t seen these chaotic conditions in today’s market, which tells me the decline has been orderly so far. High interest rates take as long as 24 months to take full effect, so we could see more stress ahead in the housing market. Then again, a recent Globe and Mail story documented how competition to buy homes is heating up in some cities.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
Ten thoughts on how to help your children learn about money.
The money-free zone
The UK singer Skinny Pelembe puts it all together – R&B, rock, dub and more. Check out Like a Heart Won’t Beat and his latest, Don’t Be Another.
From the Twittersphere
A chart comparing property taxes in Toronto against surrounding cities. Toronto’s a property tax bargain.
In case you missed these Globe and Mail personal finance-related stories
What I’ve been writing about
- CDIC covers bank deposits, but who protects your investments if your broker goes bust?
- Why parents should try to find the money for an RRSP contribution, even in these expensive times
- The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Is the middle class dead for millennials and Gen Z? • Gas prices are soaring. Are electric vehicles an affordable solution? • Crypto is booming, but should you invest? • How are young Canadians dealing with soaring rents? • Inflation is squeezing our finances. What can we do about it? • Is a hot housing market squeezing Canadians out of their small towns?
- ✔️ The housing file: How bad is housing affordability? Even a crash won't help • Sell the family home to lock in profit and then rent? Better not • Why young adults can't afford houses: Hard work got you more in the past than it does now • Five reasons you should not buy a house till you're at least 30 • Now more than ever, owning a house is not a retirement plan
- 📈 Investing: The 2022 ETF buyer’s guide: Best Canadian equity funds • The 2022 Globe and Mail digital broker ranking: Does the zero-commission revolution flip the script on who’s best? • With bonds sinking, conservative investors are waking up to risks they never saw coming • A five-step plan for dealing with the sad fact that almost every investment is falling lately • The best financial advice in advance of retirement? Work on your marriage • One-year GICs are the best deal in town for safety seekers • What to do if the financial plan you paid thousands for disappoints
- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where’s the happiness? • Who should and shouldn’t worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don’t make this potentially costly assumption about the CPP Survivor’s pension