Are you ready to spend the kids inheritance?

Don't worry, you're not the only parents having this conversation. And there are a few good reasons for having it. For example, 40 per cent of 20-24 year olds still live at home, according to the recent ABS Census. These so-called 'failure to launch' children are fast becoming "normal", according to researchers. Then there's the 'boomerang children', who return after leaving for a short stint overseas.

"This is not just an Australian phenomenon. In fact, across the entire Western world we are finding young adult children living with their parents much later than they were 20, 50 years ago," said associate professor Cassandra Szoeke of the University of Melbourne.

So, why are children today staying longer in the nest? High housing costs and the financial strain of tertiary education are the key motivators. However, you may not be doing your kids any favours by providing a free room and board with no plan for the future.

The cost of raising kids:

The most recent thorough modelling on the cost of raising kids in Australia, released last year by AMP and The University of Canberra, found the cost of raising two kids in Australia for a family on a middle income will set you back $812,000. For a higher income family, the cost rises to $1.09 million from the time your children are born to when they leave home. Alternatively, a lower income family can get away with spending $474,000. And, the longer they stay, the more the cost will eat into your hard earned Super! So, what should you do?

Here's a plan to get your kids on the path to financial success, and out of your spare room!

1. Make them pay rent.

This will help your children learn to budget and manage expenses, which makes the transition to independence easier.

2. Focus on a goal.

Teach the importance of financial goal setting and developing the habit of putting money into savings. This goal could be a down payment on a home, a car, tuition, or something else that's important to your kids' independence and success.

3. Match their savings.

Make your kids' rent money their contribution to their savings goal and offer to match their savings. This gives them extra incentive to save and reach their goal twice as fast.

Hook them up on Your Smart Money Tool to help them budget now - and in the future.