Is your young adult child still living under your roof and you’re wondering if you could ask them to contribute? The answer is different for every family, but here are some things to consider in your considerations.
After asking the question around me and on social networks, the answers you get are very different from person to person, depending on their values but also on their reality.
While some assume that their child can live under their roof without being paid, others prefer to convey the cost of living to them after a certain age.
Study or not?
The situation is also changed by the fact that the child combines his studies and a part-time job or, on the contrary, already has a full-time job.
“It depends on everyone: you can ask your child for a financial contribution out of necessity or for educational purposes.” For other families, the focus is on studying, but as soon as the child works, it has to make a contribution. In fact, we don’t want him to use all of his money on leisure expenses and be detached from the responsibilities of adult life,” explains Émile Khayat, financial planner and senior regional director at TD Wealth Management.
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How much should I charge?
Again, everything is relative.
“It depends on the child’s occupation and income, but I think it has to be a significant amount for them to understand what it costs to live and eat,” said Émile Khayat.
One could think of $100+ per week if the child is working full time.
In order to avoid confrontation and the impression that they are “making money on their own”, some parents prefer not to charge rent, but instead require certain bills to be paid.
“If the child uses the internet a lot, we could give them the responsibility of footing that bill. It’s also a good way to hold him accountable,” explains the financial planner.
How to approach the question
In order to discuss this, it is better to prepare the ground and not approach the question unprepared.
“It depends a lot on the financial literacy you have instilled in your child. If he understands what the cost of adult life is, like rent or mortgage, taxes, groceries, etc., the discussion will be easier,” says Émile Khayat.
If not, you may need to consider options such as B. paying certain bills for services that the child uses particularly, or, for example, paying for his mobile phone and his transport tickets.
Another possibility: Instead of paying a monthly fee, he could do certain tasks around the house, such as cleaning or tending the grounds. The aim is for him to realize that nothing comes for free in life and that he must also make his own contribution within the scope of his possibilities.
Set Rules
Ideally, in order to make the child more responsible and show him the seriousness of your decision, you should set rules for the timing of monthly payments and the payment terms.
“We should also discuss and clearly state the consequences of default or late payment. For example, you might not be able to use the family car for a week,” explains Émile Khayat.
Advice
- Many parents require their adult child to contribute, but set aside that money to give back when they leave the family nest. That gives him a good start in life.
- This amount could be returned to the child to make a down payment on the purchase of a property. Two birds with one stone: The child is strengthened and in the end also has an amount that it can use to buy a home.
- We could also arrange with him to have his contribution paid into a Tax Free First Home Purchase Savings Account (TFSAP) in his name. This savings tool offers many advantages, including tax benefits. Currently, you can donate up to $8,000 per year to a TFSA.