The following post is from Melissa Batai
Grace was enjoying retirement and living alone when her adult child, Kathy, and her husband and two children found out they would have to leave the rented house they had lived in for years because the owner was selling and moving out of state. Kathy and her family really wanted to buy a house, but they didn’t have money for the down payment. She asked her mother, Grace, if the family could move in for six months while they saved for a down payment.
Grace said yes.
However, Kathy and her family have now lived with Grace for 19 months. They have no immediate plans to move out, and they have not been diligently saving for their down payment. In fact, they haven’t saved anything for a down payment.
The New Trend: Grown Children Who Won’t Leave the Nest
Unfortunately, this situation happens more often than not when an adult child and his or her family move back home.
While Grace wanted to help her daughter and family, she did not anticipate them living with her indefinitely.
Steps to Take to Help Your Kids Fly the Coop
What Grace should have done was constructed an exit strategy and discussed it with Kathy and her family BEFORE they moved home. Even better, Grace could have created a contract that Kathy and her family could have signed so everyone was clear about the terms of the living situation.
Signing a contract can sound harsh, but taking a proactive step like this in the beginning can help stop misunderstandings later. Grace is irritated with her daughter now and eager to get her home back. This type of situation can escalate to family breakdowns; signing a contract or making expectations clear before the adult child moves back in helps ensure all parties are in agreement.
What Should Be Included in the Contract?
There are many details you should consider including in the contract:
Who will pay for utilities and groceries? Clearly designate who will pay what portion of the bills. Grace did not do this, and now she’s paying all of the utilities, which are much more expensive now that four additional people are living in the house. While Grace can handle paying these expenses, she’s resentful that she has to because she feels that Kathy and her family are getting a free ride AND they’re still not saving for a down payment.
Will the adult child pay rent? There is nothing wrong with charging an adult child rent. If you feel uncomfortable about it, consider having the child pay a nominal amount, say a few hundred dollars a month, which is much cheaper than if they were out on their own. If the adult child is trying to save for a house, the parent can consider keeping all of the rent money to give to the child once they move out. This can serve as a forced savings and can help the child meet her goal. If Grace had charged Kathy $300 a month for rent and kept that money every month to eventually give back to Kathy, they would now have $5,700 saved for a down payment.
How long will the adult child live with the parent? Set a specific time frame. Perhaps Grace should have told Kathy she’d have 12 months. This helps the adult child avoid feeling too comfortable staying and procrastinating on her savings goals. As a parent, recognize that you may need to utilize tough love and ask the child to move out once the time period is over unless both parties willingly agree to extend the arrangement for a certain amount of months.
Having an adult child move back in with you is not always a bad thing. In fact, it can be a positive for both parent and child, as long as firm ground rules are established and followed.
If your adult child moves back in, would you consider having him sign a contract? If you’re the adult child moving back in, would you be offended if your parent asked you to sign a contract?