Financial Responsibility of My Adult Kids Living at Home

We are living in a generation of young adults still living with their parents. For many of these YA's, it's a matter of necessity, either familial/social structure or financial.

Sometimes, a young person has a schedule that is adaptable enough to help an aging or ill parent, by living at home. Other times, the social structure of a family is welcome to a YA, as marriage is increasingly delayed in this generation.

Mostly, though, the need is financial. A young person might be trying to launch a non-traditional career. (I know a young man who is trying to get his music career off the ground, and lives at home with his parents.)

Or, a young person might be paying off hefty student loans, while still in the early years of a career. (I know a married couple that had to move back in with her parents, to help them pay off combined student loan debt.)

And if your young adult is living in a large metropolitan area, rents can exceed a young person's ability to earn.

I looked into rents for my 2 daughters, near their campus in the city of Seattle. These are not fancy-schmancy apartments. I first checked 2-bedroom units, knowing they might want a private and quiet spot for studying, each. At $1300 and up per month, that was out of the question for us. I checked the 1-bedroom apartments. This would be moderately doable. Not ideal, but okay. The 1-bedroom units that I found began at $1100 per month. So, I was curious. What about studio apartments, in someone's basement, or above their garage? I found a studio apartment, attached to someone's home, for $1000 per month.

We're not talking luxury, here. These are bare bones, just starting out apartments. Many are in sketchy neighborhoods. Heat and electricity is extra. A lot of young adults, just starting out can't afford rent in the city.

Young adults still living in their childhood homes, aren't all lazy bums, sitting on their parents' couch all day, eating Cheetos and playing video games. There are some real reasons for these YA's to need to bunk in with Mom and Dad, well past the age when we would have felt that was acceptable for us, at their age.

So, how is a parent suppose to financially treat their 20-something kids living under their roof? This is what we've chosen with our own grown kids.

To Pay Rent or Not Pay Rent

My son has a stable career, now. He lives at home with us. He benefits from both financial and social/familial support in our house. He is saving to buy his own place, in the area. I would imagine he will be ready for that step, soon. In the meantime, he's been paying us rent since he landed his first career position after university. This is expected of him, not for us, his parents, but as part of being a responsible adult. He pays all of his own bills, otherwise, such as his car and insurance, any incidentals he may need, etc. He even goes on his own vacations, now.

Our daughters are still in college, full time. They work, full time in summers and part time during the academic year, depending on their course load for each quarter. They don't pay "rent" per se. However, they each give us the majority of their summer's earnings, every year, which is put into their university fund.

We, their parents, provide room and board, all school-related expenses, including bus to/from campus, family vacations, and many incidentals, such as laundry soap, shampoo, school supplies, admission to academic-related events and shows.

But they pick up the tab for clothing, cosmetics, hair cuts, movies out, gifts for others, transportation to non-school events, and food other than what I provide at home or family dinner's out. They haven't received an allowance since they turned 18.

Yeah, it's a hard reality. You celebrate your 18th birthday, and suddenly you have to foot the bill for all of the fun stuff in a young person's life.

After they graduate, they will be welcome to continue living with us, here, as they embark upon their career journeys. But they will be charged rent, as their brother has been, scaled to whatever they can earn in their chosen fields.

I think it's acceptable for a parent to financially help out their young adult children, by allowing them to live at home. But I also feel it's beneficial for the young person's emotional development, to charge rent and have their YA's paying their way, so to speak. There's a way to help our kids, without stunting them, emotionally. Requiring some financial responsibility from them, scaled to their abilities, is the route that we have chosen for our own YA's.

What do you think? Would you (or do you) allow your young adult children to live with you? Would you charge rent? How long are you comfortable allowing YA's to live at home?

Evaluating the Budget at the Beginning of the Year

These roses have nothing to do with this topic, but I wanted to show them to you,
 anyway. I cut both of these in early December, just before the cold weather began.

I do this, without fail, every year, in the first week of January. Sometimes, it brings good news. Sometimes, it illuminates areas where I need to work harder. And sometimes it shows me that life can be full of storms.

One afternoon last week, I sat down with our budgets. Evaluating the budget requires a couple of hours. I look at each category, and check to see if we put aside enough money every month to cover each of the bills for their category. Then I make adjustments to the dollar amount in the various categories, according to their need.

I value this activity for a couple of reasons. After a month of holiday splurges, inspecting the budget refocuses my thoughts on sensible spending. And it serves as a reminder for those areas that I had planned on seeking to reduce spending. It's also a motivational tool. It shows me where we are doing this whole budget thing very right. I like to give myself a pat on the back, an "atta girl", for working so hard, year round, to squeeze a little more buying power out of every dollar. And then, of course, it serves as a tool for determining how much we need to adjust our tax withholding for the new year.

At the end of the afternoon, I have reset our new budget for the year, made changes to tax withholding and established new savings and preparedness goals for our budget.

So, how'd we do this year?

Most of the categories in our budget will remain unchanged, as we are on target with our setting aside funds for those areas.

In electricity, we have been slightly over-saving. Yay! I was able to cut that area down, by a few dollars per month, in 2017.

Our emergency savings, which would be used in the case of job loss, continues to grow, monthly. I never let a month lapse without putting something into that fund, even if it's only $3. $3 each month, for one year, results in $36. In 10 years, that $3 per month results in $360. While I try to put more into that fund, I don't consider $3 to be trivial. We began this particular savings fund in 2008. You all remember how unstable everything felt in 2008 and 2009, right? That was the impetus for this savings fund.

Heating -- we're doing well, as winter unfolds. We are spending a little into the surplus, set aside the previous year. We will hopefully end this heating season with another surplus.

For 2017, I have a new goal for our heating budget. We will attempt to set aside enough in savings to cover a complete winter's heating, in advance of the coming winter. In normal years, we have some surplus, monies put aside in the warmer months, combined with our monthly allocation in every month of the year. What I am working towards is a surplus that is large enough going into the heating season, with or without monthly allocations during the heating season, to feasibly pay all of our heating for one season.

This surplus heating budget will function much like our stockpile of groceries. It will cover us, in the event of a job loss or severe financial circumstances. Heat and food are the two recurring expenses which are vital to survival. (Our home is paid for. Otherwise, housing would be the third recurring expense, vital to survival.) So, we will set aside a small amount extra, each month, from now until November, and see how we do. Much will depend on how cold of a winter this one proves to be.

The main area in which I have been wanting to reduce some of our spending is the non-food grocery and household expenses, things like hygiene items, cleaning supplies, lightbulbs, batteries, postage stamps, kitchen items like plastic wrap and aluminum foil. You know that I don't buy a whole lot of those items, anyway. But I have been meaning to work at finding less expensive alternatives to the products that I already purchase. This goal pops up every single January. I hate that we spend so much on this category. Item by item, I am slowly (very slowly) finding new ways to buy the same or similar products.

A year ago, I discovered Cash & Carry's store brand of freezer bags. They're a better quality than Dollar Tree's freezer bags, so they can be reused a few times, each. And they're cheaper. Automatic dish detergent is another product on my list. I was close to being out of the Dollar Tree stuff, and our local DT store and their online store were out of stock of what I had been using from them. So, last month, I bought a box of Kroger dish detergent powder, using my Senior Discount. I paid less per ounce for the Kroger stuff (compared to Sun brand at DT). I'll see how it performs later this month.

I have significantly reduced my use of postage stamps, by using online, phone and auto-payment plans for everything from tuition payments to the garbage pickup service. It's only a little bit of savings. But several little bits add up to one large bit, over time.

So, the non-food grocery and household expenses category is one of my areas of focus, for this coming year. If I can just shave $5 off per month, that will be a savings of $60 per year, and I'll feel like I'm making strides in this area.

We have a few shuffles in the budget, as well, like moving monthly allocations out of savings for travel, and into savings for education expenses. And removing a savings for a new water heater entirely from the budget, and putting that money into savings for a new furnace.

That's about the short of my budget evaluations last week. Do you take time each year to go over your budget from the past year and reset the new year's budget? Does doing so help motivate you to stay the course? What areas of your budget have you been doing well in, and in which areas do you want to make some improvements?