Sharing a roof and money with adult children

Living with her parents for several months “gave me more flexibility to pursue a new career,” says Claypool, who is now a content creator in Asheville, North Carolina. Her parents covered her food and housing expenses. In return, she helped them declutter and sell around $10,000 worth of vintage toys and collectibles online.

Claypool’s decision to return home is increasingly common. The Pew Research Center found that a quarter of American adults between the ages of 25 and 34 lived with parents or other family members in 2021 and that the proportion of young adults who do so has steadily increased over the past 50 years. last years.

Stefanie O’Connell Rodriguez, host of Real Simple’s “Money Confidential” podcast, noted the trend. “Even before this latest wave of inflation, we saw a greater proportion of millennials returning to their parents and staying home longer. The pandemic has accelerated that,” she says.

While returning home can provide a financial safety net for young adults, it can also negatively impact their parents’ finances and hinder their own growth towards financial independence. Here’s how to navigate intergenerational living so that it benefits everyone involved.

Parents of young adults are often at a stage in their lives where they are ready for a change, such as retirement. Moving kids home “may not be the ideal situation for them,” says Lorna Saboe-Wounded Head, family resource management specialist at South Dakota State University Extension. “Parents should think about this decision before inviting them home.”

Consulting a financial coach or an advisor about your preparation for retirement could help you. Developing a budget to gauge your current cash flow and how an additional guest would affect it can provide additional insight.

Once you’ve decided to welcome an adult child into your home, it’s time to establish some ground rules, says Julie Lythcott-Haims, author of “Your Turn: How to Be an Adult.” Start with a frank conversation about each party’s expectations. “Be clear, ‘You’re older now, things have changed. … We’re happy to support you, but let’s talk about what we expect in terms of day-to-day norms and behaviors,'” she said.

In many cases, she says, it makes sense to treat young adults like Airbnb guests: They’ll use the kitchen and one bedroom but do their own laundry and some household chores and pay rent. Barring mental health issues or some other crisis, a young adult should be expected to participate financially as well. “If they can’t pay their rent, maybe they can afford the groceries or the phone bill,” she says.

After accepting the adult child’s financial contribution, Rodriguez says, put those details in writing. “It helps to have something to reference or to go back and edit,” she says.

David Bredehoft, professor emeritus of psychology and family studies at Concordia University, St. Paul, suggests solidifying ground rules in a formal contract. The document should specify details such as who does the laundry and who pays for utilities and whether there are quiet hours or allowed guests. “Otherwise, it’s easy to slip into old roles,” he says, adding that this trend happens to him even at age 71, when he lives with his wife’s parents in Florida for a few months every year.

Rachael Bronstein, a certified financial advisor and founder of Life’s Jam, a Miami-based coaching firm, says she encourages parents to track their expenses when sharing a home. Sometimes, she says, they don’t realize how much of their money goes to extra food, utilities and subscriptions. “They probably need to go back to their adult children and say, ‘Hey, can we figure this out? I pay for a lot of things,” she says.

If parents don’t prioritize their own savings and retirement, they may have to look to their adult children for financial assistance in the years to come. “The greatest gift is to teach financial independence,” she adds.

At the same time, Rodriguez says, the young adult returning home would have to commit to transferring any savings generated from the arrangement each month into a savings account or earmarking them for student loans.

Bredehoft suggests explicitly discussing how long the adult child plans to live at home. “Talk to them about, ‘What is your job search plan? How many hours per week will you invest in finding a job? Do you need professional help? »

Having this conversation also helps the child. Says Claypool, the content creator in Asheville: “Give yourself an action plan for when to leave, otherwise it becomes so easy to stay.”