Should parents charge rent? Nearly 70% of 25-year-olds still live at home

A recent study by the Central Statistics Office (CSO) has highlighted a major shift in young adults’ living situations in Ireland

With skyrocketing rents, unaffordable house prices, and a serious housing shortage, many young people - even those in full-time jobs - are struggling to move out. 

This shift brings up some big questions for families like; should young adults living at home contribute financially? And if so, how much?  

Nick Charalambous, Managing Director of Alpha Wealth and a financial advisor with over 25 years of experience, has shared his opinion on the topic.

For some families, asking young adults to contribute is a financial necessity. 

With the cost of food, energy, and general household expenses rising, having an extra adult in the house can be expensive. 

For others, charging rent is about teaching financial responsibility - helping young adults understand the real cost of living, learn to budget, and prepare for life on their own.  

There’s no one-size-fits-all approach. 

Some parents don’t ask for anything, while others follow the common rule of requesting a third of their child’s take-home pay. 

Another method is to simply divide household expenses by the number of people living in the home - for example, if three people share the space, each contributes a third of the total household costs.  

According to Nick Charalambous, a useful budgeting principle is:  

• Save a third of your income  
• Spend a third on personal expenses  
• Use a third for necessary bills  

Applying this to young adults living at home, parents could encourage their children to save for the future while still contributing to household costs. 

One approach could be setting aside a portion of their income in a long-term savings plan, such as a dedicated house deposit fund, to help them eventually buy their own home.  

If parents do charge rent, what should they do with it? Some may use it for everyday expenses, while others might set it aside for family trips or even save it for their child’s future - a surprise deposit fund to help them when they’re ready to move out.  

There are also financial planning and tax considerations to keep in mind. Any financial support now - whether in the form of savings or contributions - could have tax implications later, especially when it comes to inheritance and wealth transfer.  

Every family’s situation is different, and there’s no right or wrong answer. 

The most important thing is to talk about it. Having honest discussions about money ensures that everyone is on the same page - whether that means contributing to household costs, saving for the future, or a mix of both.  

As young adults continue to stay home longer, finding a balance between financial independence and family support is more important than ever.

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