Moving back home can save money—but only if you plan

The math doesn’t lie. Living in a rental apartment with a housemate and having multiple side gigs still won’t get you close to your dream of saving up for a home any time soon. It will be years before you’ll have enough money for a down payment, unless you cut your expenses drastically and save most of what you earn. Maybe moving in with your parents is on the table.

While moving back home could help achieve your goals faster—paying down debt, boosting your emergency fund or saving for a house—experts say it’s important the decision is grounded in intention and that you have a proper plan.

Plan timelines and expectations in advance

Jeri Bittorf, financial wellness co-ordinator at Resolve Counselling Services, said moving isn’t going to solve all your problems without having measurable goals in place. Set a timeline for your savings goal, such as six or 18 months, to keep you on track and so your parents know you will eventually move out.

Bittorf suggested people think about the hidden costs of living at home. “Moving back in with family doesn’t mean you’re going to have no expenses,” Bittorf said. “(Your parents) might also be feeling some financial burdens based on the economy right now.”

She said it’s important to determine whether you’d be expected to pay any rent or contribute to utilities and groceries. Meanwhile, other expenses could go up, such as gasoline costs, parking fees, or public transit costs because of a longer commute.

“I do have clients that sometimes think, ‘Oh, I’m going to move an hour and a half outside of the city to move in with family’ and then not realize the commute,” Bittorf said. “That’s not only a financial sacrifice, there’s also this emotional and personal sacrifice (of) being on the road three hours a day.”

It’s also easier to fall back into old habits of the parent-child role when living under the same roof—an age-old challenge. A constant barrage of questions about where you’re going and when you’d be back, or whether guests are allowed at home, can become overwhelming, Bittorf said. “That can be a really hard thing, especially if you’ve lived on your own for an extended period of time,” she said, adding that it may not always be worth the mental peace.

Revisit the arrangement with regular check-ins

Bruce Sellery, CEO of Credit Canada, said start by listing the pros and cons to help gauge if this move is right for you. Some benefits could be higher savings, helping with chores, not having to pay for laundry and even some logistical benefits, such as living in a nicer neighbourhood again. But it also comes with risks of relationship stress, co-dependency, and holding back on your romantic life.

Then, think about the ways to mitigate those cons, he said. That means honest conversations, for example. When someone in their 20s decides to move back home, Sellery said the conversation should be framed like a request—not an announcement. He said that could open up a broader conversation about financial goals and whether parents are comfortable with it. 

Bittorf said it’s important for the family to be on the same page about expectations as well as deciding what financial information you would like to keep private. “Your family might know that you’re moving in because of debt, but that doesn’t mean they get to ask you all the time, ‘How’s your debt repayment going? How much money did you make this month?’” she said. “You want to be very clear on what type of questions you’re willing to answer.”

But that doesn’t rule out check-ins. Sellery said it’s also important to discuss the living situation on a regular basis. “The monthly check-in is two questions: What’s working well and what’s not working so well?” he said. That opens up room to talk about solutions to make things work, Sellery said. But if communication breaks down, there’s always an option to live separately again.

“It really becomes more of a business relationship in some ways, because as a parent, you’re under no obligation to house a 25-year-old,” Sellery said. 

Read more about financial literacy:

• How to turn your child’s first phone into a money lesson
• The best free personal finance and investing courses in Canada
• Parents fear for their kids’ financial future but avoid the money talk
• How to break free from a scarcity mindset and build financial confidence

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