Across the
world, tough economic realities are forcing young adults to move back home. In
the US, 52% of 18 to 29 year old’s were living with their parents in July,
compared to 47% in February, according to a Pew Research Center survey.
In South Africa, about 42% of 18 to 34 year
old’s were still living at home in 2018, according to our latest research and
we anticipate that situation will be exacerbated by the impacts of the Covid
pandemic.
And Millennials’ finances seem to be hardest
hit, fuelling expectations that many of them will return home to live with
their parents, as we’ve seen happening abroad.
84% of South African Millennials indicated
their household incomes have been negatively impacted by the pandemic, compared
to the global average of 76%, according to a recent global report by
TransUnion.
With the shrinking job market as well as
continued salary cuts, young adults’ ability to maintain their
independence has been severely impacted by the pandemic.
If you’ve said goodbye to your kids and are
content in your empty nest, it will be quite an adjustment for all if they do
come knocking. But with proper planning and some ‘rules’, it can be a win-win
situation for everyone.
Here are some tips to
help you navigate this new-normal:
1. Make
sure everyone contributes their share
If your children move back home and are still
working, chat to them about contributing to the household’s expenses. You can
ask them either to pay ‘rent’ or contribute towards covering the increased
expenses. Where possible, agree on a household budget. Also revisit your own
budget and see if you are able to make any adjustments. Openly communicate with
your children if you are unable to cater to some of their needs.
2. Enjoy
their company and tech help
Living with your adult children again can
work brilliantly if it’s a symbiotic relationship, and you do things to help
each other. For example, they can help you with maintaining the house, keep you
company on lonely days and even assist with your tech needs, that’s if you are
a little bit technologically challenged.
3. Ensure
you have a holistic financial plan
Make sure you have a financial plan in place that prioritises all your
financial needs, including your long-term goals like saving for retirement.
Your children moving back shouldn’t necessarily put a dent in your future
financial wellbeing, depending on their and your circumstances.
Your financial plan should make provision for
when you are sick and unable to work, as well as the possibility of
retrenchment. Also consider leaving a legacy for your loved ones to help them
financially when you are no longer around. Still have debt? Prioritise paying
it off. A good financial adviser should be able to help you in drawing up a
plan that looks at your risk and retirement needs, as well as a good debt
busting plan.
4. Draw
up a will and prioritise estate planning
While nobody really wants to dwell on their passing one day, it’s important to
do proper estate planning and have a will in place for when the inevitable
happens. This will ensure that your assets will be distributed according to
your wishes and that the people you love will benefit.
It is important to keep a file with your
will, bank accounts, policies, as well as your passwords in a very safe place
that only someone you trust will have access to when you die. Remember that
cryptocurrencies can only be accessed via passcodes. If the password goes
missing, those investments could be permanently lost, so guard them very, very
carefully.
Article featured in Cover magazine written by Arobo Ramookho,
strategic retail marketing manager for Old Mutual.