While I have no statistical data to back this, anecdotal evidence tells me that the recession has many young workers moving back in with parents. Many students recently graduated college with the promise of a hot job market, only to find things frigid in employment land.
Others may be freshly laid off and in need of a place to land until they get back on their feet. Either way, it can be a tough time for both parents and their grown kids. Here are a few ideas for smoothing the transition.
Have an end game in mind. When kids move back home with parents it is a good idea to establish a time line up front – if not for moving out, at least a time to reevaluate things. This way parents do not get the idea this is a permanent arrangement, and kids are not worried about getting kicked out next week.
Sit down with her and help develop a budget. Make room in the budget for saving money towards a down payment for another home, or the first month’s rent for an apartment. Unless kids have absolutely zero income, let them participate in at least some of the household expenses. Ask them to pick up groceries a couple times a month, or pay the telephone bill, etc. This will actually help them budget their earnings by reminding them that these are expenses they will again encounter when living on their own. Simply blowing entire paychecks is not an option.
If their budget has room, charge rent. Charging rent to adult children is a controversial topic. There is no right or wrong answer here, and much of it is situational. If my kids wanted to return home just to save money, I would probably ask for some help with the mortgage. If they just went through a divorce, or were let go from a job, or some similar financially devastating experience, I would probably allow more time to get established before asking for rent money.
Some people will argue now is the time for tough love. They will advise against taking kids back in, and forcing them to fend for themselves. I guess something could be said for that, but I am a big softy. If my kids came to me with a big financial mess, and needed a place to temporarily land while they straightened things out, there is no way I could refuse. Of course, my feeling are somewhat contingent upon their work effort. If I know they are busting their butt to make things right I could support them fully. If they wanted to lay around in their room and play Xbox 360, well, that would be a different story!
When and if I did start collecting the rent money, and if I could afford it, I would put the money, or a portion of the money, in a separate account. I would then return the rent money collected to my child in the form of down payment assistance, or towards a furniture fund when they were ready to move out again.
Agree to a transition period. It might be difficult to jump from mom and dad’s house back into the real world without some assistance, at least initially. If you offer financial assistance to get kids back out of the house, again it is a good idea to have an end game in mind. Let them know up front that you can help them the first three months they are in their apartment, but at the end of that time they need to be earning enough to support themselves. After all, you have your own retirement to save for, and can only help for so long.