How to budget when your adult child moves back home

Adult children moving back home isn’t just a trend—it’s quickly becoming the norm. While the cost of living continues to climb across Canada, many Gen Z and millennial Canadians are packing up their apartments and returning to the nest as “boomerang kids.” In fact, 50% of Canadians who moved in with a family member last year were adult children.

It can be a smart move. Whether it’s because of rising rent, bigger student loan balances, a tougher job market, or difficulty saving for a downpayment, a multigenerational household can help your adult child get on their feet financially while giving you more quality family time. But it also comes with new pressures, especially on your family budget. To find out the real cost of welcoming adult children back home, we talked to a boomerang kid and a parent to boomerang kids to get their story and the four steps they recommend to set your home—and your finances—up for success.

Meet Krista: My son is out of school and working full time, but has been living at home to grow his financial skills, credit, and save up for his first house.

Meet Ali: Like a lot of people, I reassessed my life goals after the pandemic and decided I wanted to move back to my hometown and buy my first house. Even though the market was more affordable where I grew up, it still required serious savings, so I lived with my parents for two-years to save up.

Budget together

Start with a family financial meeting to look at the full picture: income, bills, upcoming expenses, and how your child moving home will shift things. By reviewing everything openly, you can build a realistic family budget that works for everyone.

Ask your adult child what they’re able to contribute, even a small amount helps them build money management habits. If finances are tight on their end, consider other types of contributions such as errands, cleaning, or helping with younger siblings. Every task removed from your plate has value.

Remember to safeguard your own financial goals, too. That includes retirement savings, debt repayment, and maintaining your credit score.

Krista: When I talked with my adult son about living at home, it was important that we established reasonable expenses. This was in part to reduce our costs as parents, but also to help our son learn important budgeting and financial literacy skills while he had a safety net. If he makes a mistake and misses the rent deadline, he won’t be incurring late fees or be at risk of eviction, but we’ll have a conversation that gives him a chance to learn what went wrong and how to avoid that mistake in the future when it could have those consequences.

Ali: I moved home shortly after finishing university, so even though I’d been living on my own for years, I wasn’t used to budgeting with a steady pay cheque. My family didn’t go over finances line-by-line, but we did review my current income and talked about a reasonable rent payment based on that. Even though my rent was much cheaper, I did have to buy a car while living at home which helped me practice managing regular payments and maintenance before taking the leap to buy my first home.

Set house rules

They might always be your child, but they’re not a kid anymore. It’s important to set expectations for how they contribute to and treat your shared space as an adult. Go over these questions as a family:

• Chores: How are they contributing to the home beyond finances? Another person adds more mess, cooking requirements, and other responsibilities to the household. Work together to figure out ways to spread that load amongst family members, so you don’t end up overworked.

• Guests: It’s important to encourage your adult child to maintain relationships, but rules are different in a shared space. How many people are you okay with them having over? How much warning do you need?

• Shared spaces and resources: There’s nothing worse than going to grab your leftovers and realizing they’ve already been eaten. Establish how shared resources like food will be treated. Will there be a specific place to put saved food? Do you plan on eating together at mealtimes? It’s important to also establish similar rules with other shared amenities, like a car.

• Quiet hours: You might have different sleep or work schedules, so what time does the house need to be quiet so everyone can get the rest they need?

• Shared credit cards or accounts: Do you have a shared family or household credit card? Is your credit something you trust your child with? If so, still make sure to monitor it regularly to protect your credit score.

These conversations aren’t always easy, but they’re way easier than dealing with resentment later.

Krista: My son lives at home to learn financial and home management skills. Living on your own is more than being able to pay bills: it’s keeping up a cleaning routine, knowing when home maintenance needs to be done, and doing laundry without ruining your clothes. Living at home gives my son time to figure out how to manage those responsibilities for himself and takes work off my partner and my plates in the meantime.

Ali: I hadn’t lived at home since high school, so coming back as an adult meant renegotiating childhood rules. I took on a lot of my old chores like cleaning shared areas of the house, helping with the gardening, and cooking meals once a week. It was also important that—even though I didn’t have a curfew—I let my parents know where I was going and when I should be back so they could make sure I was safe.

Set goals and a timeline

Most adult children don’t plan to move home forever. Identify the financial goals that brought them back in the first place, such as:

• Saving for a downpayment

• Paying off student loans

• Improving their credit score

• Reducing high-interest debt

• Finding steadier employment

• Building an emergency fund

From there, build a realistic timeline. How long can they stay? How much can they save each month? What steps do they need to take? Life happens, and plans may shift, but having structure gives everyone peace of mind. Our article on financial goals outlines how to set realistic financial goals and how to achieve them. The key is to make your goals specific, realistic, and measurable—with a set deadline.

If debt is part of the reason they moved home, encourage them to try our debt calculator and book a free consultation with one of our debt solutions professionals.

Krista: The biggest goal for my son is building credit and saving up for his first home. Having no credit is the same as bad credit and can be hard for young people to build a substantial credit history. When we had our initial meeting, my family sat down with a financial professional and came up with a plan for how my son could save and build credit over a reasonable timeline. By the end, we were all clear on what his savings goals were and what deadlines we wanted to keep track of his progress.

Ali: Though I moved home with a clear goal: buy a house, I should have done more research on a timeline. Originally, I had planned to stay home for two years, but the housing market was growing rapidly in my city. I was still able to make the two-year deadline, but it required both me and my parents to change our expectations on the kind of home I would be able to afford.

Keep talking

Communication is everything. Living together as adults can stir up emotions on both sides, so make check-ins a habit. Revisit your budget, reassess contributions, and talk openly about financial stress. If inflation pushes bills higher or if your child’s income changes, adjust your plan together.

Krista: While my son has been living at home, he did experience a layoff. The job market has been particularly difficult for young people, and there was a time when he was living off unemployment and savings. At the time, we had a discussion and decided to continue his rent payments because that’s how he would have to manage in the real world. Luckily, he was able to find work again quickly, but that isn’t the case for everyone. It’s so important to keep the conversation going and be willing to make adjustments when life gets in the way.

Ali: Talking about finances with your parents can be stressful. I wanted to prove that I was an adult and could handle the world alone, but you don’t magically learn all the skills you need to manage life and finances the moment you turn eighteen. It takes time, practice, and sometimes getting it wrong.

If debt becomes overwhelming for anyone in the household, you have options. Our Licensed Insolvency Trustees can walk you through them and help you figure out next steps. A fresh start is always possible—book a free consultation today.