My Kid Lives at Home To Save Money: 4 Ways We’re Still Safeguarding Our Future
Written by
Rebecca Neubauer
Edited by
Nicholas Morine
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Is your child moving back home in order to save money? If you’re worried this may impact your retirement plans, don’t worry. Here are four ways you can plan for an adult child living at home while safeguarding your financial future.
1. Understand Your Finances
Having a clear picture of your personal finances — including income, expenses, and retirement savings — will help you determine the amount of financial support you can provide to your kid while also safeguarding your future.
When you get a clear picture of your personal finances, it may become clear that you need your child to pay rent or purchase their own food to avoid increasing your expenses. Doing so could allow you to continue to meet your savings and retirement goals.
2. Set Expectations
While you may already be thinking “my house, my rules,” this should include financial and non-financial expectations. If it turns out that you are able to financially support your child while they live at home, you may instead choose to have them contribute in non-monetary ways, such as cleaning the house, mowing the yard, or doing other tasks that you may have been paying others to do previously.
Another strategy is to charge your child rent which you then give back to them when they move out, as a sort of forced savings strategy. This was an idea that Cheli English-Figaro — author of “When the Nest Never Empties: A Handbook for Living with Adult Children and/or Elderly Parents” — had when her son moved back in after college, but her husband did not agree, as detailed by Fidelity.
3. Get on the Same Page as Your Partner
Discuss expectations with your partner, or any other people who are living in your home. Your ideas of how your child should contribute financially and otherwise while living at home may vary from your spouse’s, so it is important to have these conversations before your kid moves back in.
“I shouldn’t have assumed that my husband and I would agree on issues like how much a child should contribute to the household,” English-Figaro said. “That’s also a conversation we should have had earlier.”
English-Figaro’s husband did not like the idea of charging their son rent, and so ultimately, they decided he could live at home for free. You should discuss your family finances, financial goals, and expectations for your child with your partner before having these conversations with your son or daughter.
4. Discuss Financial Goals
Being on the same page with financial goals will help everyone get on board with the expectations you lay out. If your child is moving back home to save money for a future home purchase, it is important to discuss a timeline for when you would like them to save enough money to be able to make that purchase and move out.
“I should have asked more questions,” English-Figaro said. She indicated that, if she could have done it differently, she would have “insisted that he make frequent and more productive visits to his college career center.”
You may also want to share your own financial goals, such as what age you are planning to retire, or whether you are saving to make a large purchase such as a second home, new car, or recreational vehicle. This models saving behavior and helps your child understand why you are laying out similar expectations for them to save.
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