Financial Advice for Parents Who Have Adult Children in the Home

You know the funny thing about being a mom is that you think your responsibilities will decrease once your children graduate high school and head off to college. However, this is not always the case. There are some parents who find that getting their children to “leave the nest” is a challenge, while others open their doors when their children start struggling with the “real world”. Whatever your circumstances might be, having an adult child in the home is a LOT different than what you remember as they were growing up.

 

You now have an older, able-bodied adult in the home occupying a lot more of your space, resources, and of course….food. The cost of living can go through the roof if you’re not careful, making the adjustment to being in the same space with your child a lot harder – especially if you’re nearing retirement or on a fixed income.

 

The best thing you can do for your household is start looking ways to cut back on spending so that you can accommodate your needs and the needs of your child until they’re capable of providing for themselves. Here are some suggestions on how to do this:

 

Though the hope is that your child will pitch in, one can never be too certain. Therefore, you’ll want to take a look at your personal expenditures to determine how much “wiggle room” you have when it comes to your budget. If you have multiple credit cards with balances on them, consider getting a credit card consolidation loan. If you find that things are extremely tight you should start looking for ways to cut back on your budget or increase your income such as a reverse mortgage. This is essentially an option for homeowners aged 62 and older to take out a loan on the equity of the home. There are several eligibility requirements but learning more about reverse mortgages and other financial options to lower the cost of living is as simple as doing internet research.  

 

 

Whether your child never left the nest or simply is down on their luck at the moment they need to be contributing financially in some capacity. Whether it’s getting a full or part time job, doing odds and ends for neighbors to get paid, or doing things around the house until they’re able to financially pitch in, you want to ensure that they’re doing something productive to aid the household.

 

 

While this might sound more like landlord-tenant than parent-child, your child is an adult. They need to be taught life skills such as being financially responsible and accountable. Drafting a contract or lease of sorts lets your child know that while you’re there to support them through this period in their lives, you expect them to step up and take responsibility. Negotiating a monthly amount for rent, food, and their share of utilities will help them get into the habit of being accountable for their own expenses. When drafting this agreement, be sure to also put behavioral clauses in there as it pertains to what you expect of them while living under your roof. This can include visitors, curfew, and whatever else you deem necessary to make this living arrangement as comfortable as possible.

 

 

 

Ultimately, your child will need to learn the importance of saving in order to afford the things they want in life–or maybe they need to get out of debt. No matter how old they are, they could use some financial education that will further help them obtain those goals. Whether they have a savings plan or not, this is a pivotal time to talk to your child and encourage them to pay off debt and put money away. A nice incentive might be to match their savings efforts at the end of a predetermined period. This way, they can meet debt-reduction and savings goals a lot faster.

 

Having an adult child in the home will certainly present its challenges. The dynamics of the parent-child relationship have changed, ultimately creating friction at times. When it comes to finances, the best thing you can do is evaluate your circumstances, iron out what you expect your child to help with, and put it in writing for accountability. With time, your child will get back on their feet again, and thanks to you will have the financial skills necessary to take life by the horns. 

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