The Montrealer
March 17, 2023.
Almost half of young adults between 18 – 29 reside at home with their parents to save money. This is not surprising amidst high inflation and soaring real estate and housing costs. It begs the question: “Is this a good strategy or a bad one?” That depends. For those who are using the opportunity to plan for their future, this is a great strategy. I also understand that in many cultures, living at home with your parents until certain life milestones is a cultural norm that is beneficial for families. However, many of these young adults are using their cost “savings” to fuel high-end retail sales and extravagant lifestyles. According to a property management survey, only about 40% of those living at home are actually paying rent, and those rents are extremely low relative to the real world.
This increase in disposable income among young people, combined with the powerful influence of social media, has meant good news for the luxury industry. It’s an unfortunate reality that social media bombards younger generations with pressure to ‘keep up with the Joneses’ – and leaves them living beyond their means to keep up with their peers. The message society should be sending them is ‘don’t go broke to look rich’. Between high-end restaurants, dream vacations, and luxury brand names, many young people are living a lifestyle that they will not likely be able to maintain once they enter the “real life” of mortgage or rent payments, food costs, electricity, etc.
Support their financial growth and maturity is by educating them about financial planning – saving, debt management, investing, managing lifestyle expenses, etc.
