Empty nest full again? How to cope with the costs

As a parent, it’s natural to want to do everything you can to help your kids as they grow up, including sacrificing to make sure that they are taken care of. But what happens when the children are grown up and still need help financially? And what happens when helping your adult kids out means deferring or sacrificing your own financial goals?

parents expenses children

According to a recent TD study, an increasing number of millennials are leaning heavily on their baby boomer parents, as the high cost of living is sending them back to live at home.

Some highlights of the study include:

  • 25 per cent of boomers admit that they are helping their millennial children or grandchildren financially.
  • 62 per cent of boomers feel that the extra costs of having their children return to live at home is interfering with their ability to save for retirement.
  • 58 per cent indicate that falling short of their retirement savings goals is causing them stress
  • Millennials are largely seeing their return back home as a last resort; 43 per cent are willing to cut costs wherever they can to avoid being a financial burden on their parents; 44 per cent are well aware that their return home is making it hard for their parents or grandparents to save.

“When the household budget is tight, it sometimes comes to an “either or” situation for parents trying to assist their adult children. They press pause on their retirement savings and/or go into debt to cover these unanticipated costs at a time when savings should be ramping up,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

‘Unfortunately, when you stop saving, it can be hard to play catch-up as you near retirement. The consequences can be far-reaching, with boomers having to work longer, acquiring debt in retirement or adapting to a lower standard of living because of retirement savings shortfall,” says Schwartz.

Balance your savings and helping your kids

Establish a budget for the financial assistance that you can reasonably provide to your children without stopping your savings or dipping into debt. Arrange your budget so that you have automatic savings every month deducted right from your paycheque. The idea is that savings need to take priority and that you can strategize your financial assistance with what’s left over.

Avoid using debt to cover costs

It can seem like a reasonable short term solution to take out debt to help out your kids, assuming that they’ll pay you back or that you’ll pay it off later. That’s a gamble that you shouldn’t take, especially if your timeline to retirement is short.

The more debt you accumulate, the lower your overall net worth, which ultimately reduces the amount of your savings. What if you had to cash in and pay off the debt because of unforeseen circumstances?

Be creative with your household budget

Because you have more expenses with your kids at home, you need to find other ways to get more mileage out of your budget. Is your child able to pay rent? Perhaps they can cover some other expenses?

Don’t be shy to ask your kids to pitch in and help. If you hire out things like yard care or snow removal, get the kids involved and take that extra cash to the bank.

Establish a timeline

Having your children live back at home is a temporary measure until they get on their feet. Negotiate a timeline that is reasonable for both of you that they will leave the nest again. This can help both you and your children budget appropriately so that they can head out on their own path to financial stability-for good this time.

Have your retirement savings plans taken a hit? Pay down your debt more quickly so that you can focus properly on savings. Call us at or check out our online debt analysis.

Press Inquiries

Shivani Karwal
Media Manager

pr@consolidatedcredit.ca
1-800-656-4120 x 1055