Setting Financial Ground Rules If Your Adult Child Is Moving Back

Setting Financial Ground Rules If Your Adult Child Is Moving Back Home

As COVID-19 spread across the country, parents also saw a wave of adult children move back home. Pew Research recently found that 52% of 18 to 29-year-olds now live in a parent’s house.

For some children, they may have moved back simply due to safety during the virus response or because universities switched to e-learning. Others may have returned because of financial reasons. As parents, it’s important to help your children find their footing but you also don’t want to put your own financial security at risk. You can achieve this by setting boundaries and providing clear expectations for how you expect your child to contribute as they live under your roof.

Discuss Whether They Will Pay Rent

Will you expect them to pay rent while they live with you? It’s important to have this discussion before they move in. You want to ensure that everyone has the same expectations for the arrangement. Your child might assume they can live in your house, rent free, for as long as they want.

Have a conversation about what they can afford to pay and what you require from a financial standpoint, before they move in, so each of you remains on the same page.

Find Other Ways They Can Contribute

It’s possible that your child needs to move back because they’ve lost their job. If they’re under financial hardship, then it’s understandable if you don’t want to charge them rent. But that doesn’t necessarily mean you have to let them sit on the couch all day watching TV, using your kitchen as their own, free, grocery store.

Instead, set ground rules for their stay. Are they looking for a job? Do you want free rent contingent on them following through with job searches? Do you want them to pitch in for food costs? Will you allow them to borrow cash?

If they’re not paying rent, give them tasks that will help save you money. Ask them to mow the lawn or paint parts of the house, in between the job search. It will give them something to do beyond just worrying about their next interview.

Set A Timeframe

While you may love having your child back at home – and they may enjoy it as well – set expectations on how long the stay will last. Talk with your child about when they hope to move out. If it’s until they can afford a place to live by themselves, then also ask them what they need in order to feel comfortable enough to live on their own. Do they need a few months’ paychecks first? Will they move as soon as they have a job? Are they saving for a down payment on a house?

By agreeing to a plan, you’re protecting yourself in case they have thoughts of a longer-term stay. Plus, it will help you enjoy this time you have with your child at home.

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Jeff Mushen, MSF, CFP, ChFC, APMA, is a Private Wealth Advisor and CERTIFIED FINANCIAL PLANNER practitioner ™ with Ameriprise Financial Services, LLC. in Edmonds, WA. He specializes in fee-based financial planning and asset management strategies and has been in practice for thirteen years. To contact him at (425) 640-8636, 110 James Street, Suite 100, Edmonds, WA 98020. or www.ameripriseadvisors.com/jeffrey.m.mushen

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