Line your children's pockets, not their landlord's

Don’t let your children be trapped into paying rent to a landlord. In today’s economic climate it costs almost the same to own as it does to rent. Often the only difference is having a sufficient down payment.

Pennies add up. Even something as reasonable as $700 a month is the equivalent to $8400 for the year. If they pay that for a 3 year period (assuming no rental increases) you’re looking at $25,200 being handed over to a total stranger. Imagine what they could have done with that money.

Here are some simple and practical ways you can help them save for a down payment;

• Instead of buying a car as a graduation gift. When they are ready to move out either provide them with a down payment or give them the down payment as a ‘loan’. Often first time home buyers can purchase a home with as little as 5% down.
• Let them stay at home longer. If they can live at home for a few years while working full time they should be able to save up enough for a down payment.
• Charge them rent. If your children have a part time job through high school then collect one or two hundred dollars per month as rent. Put the money into a special savings account and give it to them as a gift when they are ready to leave home. You can even top that up to make it an even bigger gift.

Financial stability is just one of many factors that can lead to a happy and rewarding life. Helping with a down payment is one step you can take to lead them in that direction.

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