The High Cost of “Adulting”

Being a responsible adult costs a lot these days. Trust me, I have a lot of experience with it. Jill and I make a decent living, yet we are still often shocked at how much more we’re paying at the grocery store, the gas pump, at restaurants and more. Inflation is taking a bigger bite out of our wallets these days. We feel lucky though, because while higher prices are painful we haven’t had to drastically reduce our lifestyle . . . yet!

I got to thinking about how much “adulting” costs after speaking recently with a good buddy of mine, I’ll call him Jim. Jim and his wife are both professors at local university. They’re in their middle-50’s and are both tenured after devoting most of their careers to education. Jim was lamenting that they’ve been looking forward to their 50’s and becoming empty-nesters. Of course they love their 2 sons, Jim says, but one in particular is a 24-year old college graduate who doesn’t seem to be in any hurry to move out of their house. Their younger son is away at school and finishing up his junior year of college and has no plans to return home after graduation. Jim thinks his oldest seems too content at home, while his wife insists that life is too expensive right now for him to move out just yet.

This is not an unusual situation these days, unfortunately. With record inflation and almost prohibitive housing prices, more young adults are choosing to live at home with their parents. At least until the economy improves. In fact, according to the most recent Census Bureau, almost half of all young adults aged 18 to 29 are living with their parents — the highest level since 1940₁. Multigenerational living has been steadily increasing over the past five decades, and the COVID-19 pandemic added to the trend with many adults returning home. Some may suggest that these adult children are being spoiled or enabled, but I believe the real truth is that many simply cannot afford to live on their own right now.

For many young adults there are numerous practical benefits to living with your parents. But ultimately the goal should be to work towards becoming financially independent. Morgan Stanley analysts say these young adults, typically paying little to no rent or other household bills, therefore have more room in their budget for discretionary spending and are helping to drive a boom in the luxury goods industry₂.

Many of them are using what they are saving on rent to splurge on designer handbags and expensive jewelry instead. And while this may seem like a pretty fun existence for adult children, it isn’t helping them learn the financial skills they will need in life like budgeting, bargain hunting, and putting needs before wants.

If this situation sounds familiar to you, you may need to nudge your children in the right direction. You want your children to feel loved and welcome, but that doesn’t mean you can’t set expectations and ground-rules for your home. Things like paying at least some rent, a portion of the weekly groceries and doing chores around the house. Not only will this require them to manage their money more carefully, but it will also help prevent you from shortchanging your own retirement plans by funding their adult lifestyle.

I mentioned to Jim that he may need to take a more proactive approach to helping his oldest get his bearings as an adult. For example, I suggested he discuss with him a few ways to help him understand the consequences of his buying decisions. For example, he should learn to avoid debt whenever possible. Any debt he has now should included in a plan to pay it off. Jim might ask him if, for example, the PlayStation he put on a credit card 18 months ago is still worth the monthly bill he has to pay.  The idea of buy now-pay later may seem pretty neat idea at the time, but you have to consider that the novelty of the purchase will likely wear off and you’ll be stuck putting your hard-earned money towards the bill each month.

This is also an opportune time to encourage him to set up a savings account. He will eventually move out (Jim assures me this is true), so he should make sure he has savings for when he eventually leaves the nest.

Another great concept to learn now is bargain-hunting. It’s important to know how to check and compare prices, and where to find good deals. For example, take auto insurance. You can get roughly the same coverage amount from dozens of insurance companies but the premium can vary widely, as much as 50% or more. Some companies cater to different demographics, so pricing is not uniform among companies. A little comparison shopping can make a big difference and instill a greater sense of control of your money.

And the cash saved on insurance frees up room in your budget to increase your savings – or perhaps send a little more mom and dad’s way.

A a father of 3 adult daughters, I believe that it’s our role as parents to educate and guide our children in the right direction. The dividends will be worth it – and you just collect a little rent money in the meantime.

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, and Mansfield, MA. Insurance offered through its affiliate, CutterInsure, Inc.

We do not offer tax or legal advice. Jeff can be reached at This information is intended to provide general information. It is not intended to offer or deliver investment advice in any way. Information regarding investment services is provided solely to gain a better understanding of the subject of the article. Different types of investments involve varying degrees of risk, including the potential for loss. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Market data and other cited or linked-to content is based on generally available information and is believed to be reliable. Cutter Financial does not guarantee the performance of any investment or the accuracy of the information contained in this article. Cutter Financial will provide all prospective clients with a copy of Cutter Financial’s Form ADV 2A, Appendix 1, applicable Form ADV 2Bs and Form CRS as well as the firm privacy policy. Please contact us to request a free copy via .pdf or hardcopy. 1. 2. Ibid