Today, it’s not uncommon for adult children to return home or never leave the nest to start with. About one in three 18- to 34-year-olds live with their parents according to recent survey data.
Moving back home can be a wise move for grown kids who may be dealing with job uncertainty, earning a low income, and/or be facing a mountain of student loan debt.
And it can wind up being a good deal for parents as well.
Some of the benefits: opportunities for companionship, the possibility of sharing household expenses, and the ability for adult children to pay down student debt and save money for longer-term financial goals (for instance, buying a house).
But living in the same household again can also bring opportunities for tension and misunderstandings.
That’s why parents who welcome their kids back may want to set a few guidelines. Here are some rules both parents and grown children might want to wrangle before moving back in under one roof.
What Is the Timeframe?
When adult children move back home, it’s helpful for both parties to have a timeframe in place, rather than the ’’foreseeable future.”
This may mean talking about why the move is happening. Is it to save money? If so, what is the money being saved for, and at what point should the child move out?
Some parents might find it helpful to set up a trial period, after which they can have a frank conversation about what is and is not working in the arrangement.
💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.
Going Over the Financials
Many misunderstandings from adult children living at home stem from confusion over how much money, if any, they are expected to contribute.
It can be helpful for both parties to consider their expectations before coming together and talking through them. Some issues you may want to think about and then discuss:
• Will adult children be expected to pay rent? And if so, how much will rent cost? When will it be due? Some parents might want to set a flat rate, while others might consider a percentage of the child’s income, if that income is currently low but expected to rise.
• Will the child be responsible for a portion of bills, groceries, or other household costs (recurring and/or discretionary expenses, as you decide)?
• How will resources be allocated? Is the fridge open for anyone? Can the child use the family car if they need it?
• How much will bills go up with additional usage? Parents might decide they want their child to pay for any overages, or they might be okay with handling the increase themselves.
Recommended: How to Manage Money Better
Going Over House Rules and Behavior Expectations
Some parents have a “my house, my rules” expectation. But it can sometimes be mutually beneficial if both parties talk about behavior expectations with an attitude of give and take.
Often “unspoken expectations” don’t come up until a problem occurs. Talking through them proactively can make sure that everyone is on the same page.
Some issues parents and adult kids may want to go over:
• What are expectations for guests? Is it okay for romantic partners to sleep over? Do parents need a heads up before guests come by?
• What are communication expectations? Should a child inform their parents if they won’t be home by a certain time?
• What chores are expected? It’s wise to go over whether or not you expect that your child to do some of the supermarket shopping and/or clean any areas of the house beyond their living spaces. It’s perfectly acceptable to have your adult child pitch in on dinner duty, take on cleaning, or otherwise contribute to the house as an adult. Perhaps they pay for their own monthly supermarket costs.
• What do daily schedules look like? Maybe one family member needs quiet for work meetings. Maybe another needs access to family exercise equipment or the shower in the morning? Talking through routines — from breakfast to bedtime — will set expectations and avoid misunderstandings.
• What does privacy mean when you’re under the same roof?
Both parties may be concerned about how the new arrangement will affect their lives, and talking through those concerns can help people find solutions that work for everyone.
💡 Quick Tip: When you overdraft your checking account, you’ll likely pay a non-sufficient fund fee of, say, $35. Look into linking a savings account to your checking account as a backup to avoid that, or shop around for a bank that doesn’t charge you for overdrafting.
Helping Adult Children Achieve Financial Independence
There’s nothing like living together to get financial habits out in the open. This applies to adult children and their parents.
By keeping an open dialogue about money, however, you can help your adult children get on the right financial track (and perhaps move out sooner, rather than later).
Here are some ways you may be able to help adult children work towards financial security.
Ready for a Better Banking Experience?
Open a SoFi Checking and Savings Account and start earning 1% APY on your cash!
Talking through financial and savings goals
Instead of asking your adult child how much they have saved, or how much consumer credit card debt they have, consider asking them to talk through their short-term financial goals and long-term ones too.
Putting rent to work
Some parents who are in a position to do so may want to charge their children rent and then use that money to gift to their child for a down payment, help with tuition, or hit another financial goal.
Or, in lieu of rent, you might request that your child set up an automatic deposit into a savings account that could eventually become a security deposit on a rental or an emergency fund.
Teaching by Example
One way to encourage disclosure about your adult child’s financial picture is to talk through your own.
Talk broadly through your retirement plan, any long-term care plans, or how you hit your own financial goals (such as buying a house). This can help your child start good financial habits and build a positive money mindset.
After all, personal finance is not typically taught formally, and giving your adult child — no matter how old — some insight into the tools and strategies you use can give them ideas for how they can manage their money and cut back on expenses.
Trying Not to Nitpick
While it’s helpful to talk through your own strategies, it may not be helpful if your child feels like you’re critical of the way they are spending money.
Let’s say your adult child buys a latte every day. Sure, you can point out how much they would potentially save if they invested that money, but for the sake of the relationship, it may be easier to let certain habits go and focus on what your child is doing to work toward financial goals, such as investing in their company’s 401(k) plan or doing their taxes well in advance of tax day.
💡 Quick Tip: If you’re faced with debt and wondering which kind to pay off first, it can be smart to prioritize high-interest debt first. For many people, this means their credit card debt; rates have recently been climbing into the double-digit range, so try to eliminate that ASAP.
Living under one roof may not always be easy for adult children or parents, but it comes with an opportunity for growth for everyone, as well as a closer relationship as equals.
Part of forging that relationship may involve setting some parameters early on about what is expected from grown children while they are living at home, from how much they may be expected to contribute financially to how often they can use the car.
Letting kids move back home (where they can live more affordably), and having open discussions about money, can help them not only save, but also develop good financial habits.
SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.