Time to stop shaming millennials for living with their parents, personal finance experts say

Krystal Yee was 22 when she realized she couldn’t keep up with debt payments and rent at the same time.

So she asked her parents if they would take her back in.

They did, and three years later Yee had finished school and eliminated $20,000 she had accumulated in student and credit-card debt. She even managed to squirrel away $3,000 in savings.

READ MORE: The number of young Canadians going bankrupt is rising — but student debt isn’t the whole story

Moving back with her parents was “the best financial decision I ever could have taken,” said Yee, who is now 34 and a popular personal finance blogger.

But it wasn’t easy. In addition to the enormous self-discipline it took to stick to the austere budget Yee had imposed on herself — with a $30-per-month dining out budget, for example — there was that nagging feeling that she had failed to launch.

“I felt like I had failed, like I wasn’t an adult,” Yee told Global News.

All of her friends had moved out, and stayed out.

And yet, a decade or so later, many of them are still paying off their student loans.

Living with mom and dad is often the financially responsible thing to do

There are many reasons why staying at home through university or returning to the parental nest after school makes sense financially, if your family can afford it, Yee says.

Pay down debt sooner

With student debt currently averaging $26,000, living at home can be a shortcut to financial freedom. It doesn’t have to be a free ride, said Yee, who paid monthly rent of $150 to her parents. Still, that cut her rental and utility expenses by $500 a month compared to when she was on her own. It allowed her to earmark $1,000 a month for debt repayment out of a take-home pay of about $2,100.

READ MORE: Could you handle a 33 per cent interest-rate hike on your debt? If not, start paying it off now

Building real financial independence

Living at home is also an opportunity to build an emergency fund, Yee said. Having one can ensure you won’t have to dip back into mom and dad’s pockets if you hit a rough patch once you’ve moved out. For millennials, that might come in handy during a short spell of unemployment between job contracts, for example.

It’s also a good idea to have some money set aside for move-out costs, such as the first and last month of rent, utility set-up fees, and furniture, said Yee. When she moved out from her parents’ home in Victoria, B.C. and got a place in Vancouver, the process cost her a whopping $3,000, despite the fact that her home decor mostly consisted of IKEA hand-me-downs.

READ MORE: Have you heard about savings loans? Think carefully before signing up for one

WATCH: Best and worst provinces for student debt

Having adult children at home doesn’t have to be a complete financial loss for parents

The key to a successful co-habitation between parents and their grown-up children is open lines of communication, says Jason Heath, a certified financial planner and managing director at Objective Financial Partners.

“It’s important to set parameters,” he notes.

For example, it’s a good idea for young adults to share their financial objectives with their parents, as well as how long it might take to reach them, said Yee.

If you’re taking advantage of room and board at mom and dad’s, it’s also important to give back.

READ MORE: Did you sell your home in 2016? Let the CRA know or else…

That can range from paying the market price of renting their basement to helping out with a few of the monthly expenses. Besides showing appreciation for the help you’re given, keeping track of bills prepares you for managing your own household once you’ve finally cut the financial umbilical cord, both Yee and Heath say.

And parents who had to postpone turning the the kids’ bedroom into a gym for a few more years may reap financial rewards for it later on.

Another common reason for kids to stay at home, in fact, is the need to save for a down payment on a house, especially in places like Vancouver and Toronto, said Heath.

Forty-two percent of first-time home-buyers in British Columbia received financial aid from family last year, and 35 per cent did so in Ontario, according to a recent survey by online rates-comparison site RateHub.

Even provinces with less expensive real estate saw similar numbers, with 45 per cent of Quebecois, 38 per cent of Albertans, and 33 per cent of young adults in Manitoba and Saskatchewan resorting to help from the bank of mom and dad.

READ MORE: Are federal mortgage rules actually working? Not really.

But parents who allow the kids to stay with them for a few years during or after university might find that they don’t need to help them buy a house, said Heath.

“What’s the bigger cost? A down payment or having your kid living in the basement?” he noted.

WATCH: Keeping student debt under control

3:02 Keeping student debt under control

Returning to the nest is increasingly common, but the stigma persists

Forty-two per cent of Canadians between the ages of 20 and 29 were living with their parents, according to the 2011 census. That’s up from 32 per cent in 1991 and 27 per cent in 1981.

WATCH: Does your adult child still live at home? So does 42 per cent of other young adults

0:33 Does your adult child still live at home? So does 42 per cent of other young adults

The numbers in the U.S. are similar, with 40 per cent of young Americans living with relatives as of 2015, the largest share since 1940.

That’s hardly surprising given today’s high cost of living, said Heath.

“A lot of kids these days are doomed to be able to come up with their own down payment,” he noted.

READ MORE: 6 tax credits and deductions that can save students (and their parents) a bundle

But the older generation don’t always recognize this, he added. Even someone in their mid-40s who bought a house 10 or 15 years ago would have been able to do so with far smaller outlays than millennials entering the housing market now, he noted.

Yee, who now lives in Vancouver, is old enough to remember buying a condo in the city in 2011 without too much drama. It would be a different story today, she acknowledged.

“There’s still a lot of that ‘I had to walk to school uphill in the snow’-type of mentality among older generations,” said Heath.

“But today, it’s a different world.”