Empty Nest? What You Should Know Before Letting Kids Move Back Home

Woman holding $100 bill in front of face.

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Your child graduated from college, got a great job, moved out, and appears to be doing well. Everything seems to be going great. Then things take a turn for the worse. You get a call that he lost his job and is having trouble making ends meet, and now wants to move back home. You’ve finally settled into the next phase of your life, so allowing your child to move back will require some adjustment, especially when it comes to finances. The Cheat Sheet reached out to Shelly-Ann N. Eweka, a Denver-based financial adviser with TIAA, to get her advice on what to consider when letting adult children move back home.

The Cheat Sheet: Why are some adult children moving back home?

Shelly-Ann N. Eweka: As a result of increased living costs, a volatile job market, and sizable student loans, many recent graduates and young adults choose to move home with their parents to alleviate overwhelming expenses.

CS: Is this becoming more or less common?

SNE: This is an increasingly common trend and one that both young adults and their parents are having to adjust to.

CS: What are some drawbacks to letting your adult child come back home?

SNE: One of the most common drawbacks is that parents tend to lose sight of their own financial goals and priorities when their adult children move home. Although eager to help, it is crucial to keep sight of your priorities and financial goals; do not sacrifice your future financial security in an effort to lend support. While it is possible for your adult children to take out a loan to pay for the cost of higher education, you cannot take out a loan to fund your retirement. It is important to remember that a lack of retirement savings could create a burden for your children later in life, when they need to support you.

Man calculates money on calculator along with piggy bank

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CS: What are some ground rules that parents should set when allowing an adult child to move back home?

SNE: For starters, parents must continue to set aside money for retirement, pay down debt, and take care of other essential expenses. Also be sure to put away money in an emergency fund to cover unexpected costs like medical bills or home repairs. Once these priorities are taken care of, determine how much you are willing to help financially early on to avoid arguments and misunderstandings. Encourage adult children to get part-time work if they are challenged with finding full-time jobs. In addition, make an adult child responsible for a bill, such as the cable bill. This way, they have ownership over one aspect of household finances and can be held accountable.

man counting money

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CS: What should a parent do if their adult child stops helping with household finances?

SNE: If you are the parent of a child who cannot contribute financially, set clear expectations for how they can help with household chores, errands, and maintenance. Parents can frame financial conversations to be goal-oriented and positive, in order to motivate and encourage good habits. Although it may feel like a setback for some, young adults who have the opportunity to live at home before moving out on their own are oftentimes better equipped with the necessary tools to achieve financial security both in the short- and long-term.

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