The WSJ has an article, cleverly entitled "Mother, Can You Spare a Room," about older children returning home to live....and the effects. The article sets up some particularly pertinent...and poignant...rules.
1. "Parents, meanwhile, are finding themselves stuck caring for children, sometimes for much longer than they planned, with no exit plan in sightoften damaging their own financial health and retirement savings.... hosting an adult age child back at home can cost between $8,000 a year to $18,000 a year....
a. U.S. Census Bureau figures, 22.6 million adults between the ages of 18 and 34 were living at home with their parents in 2012, about 32% of all people in that age group. That is up from 18 million, or 27%, a decade ago. The percentage of young adults between 18 and 24 years old living with parents has increased the most, to 56% in 2012 from 51% a decade ago.
2. Parents should be firm with their kids, say advisers, by making them pay for rent and other expenses if possible, setting a limit for how long they are allowed to stay, and avoiding the temptation to offer extra financial help, like loans.
3. All of this is weighing on parents' finances.... 26% of parents with adult-age kids living at home have taken on debt in the process, either to help their child with a loan or for their own spending needs. Thirteen percent delayed a life event like buying a house, and 7% delayed retirement.
4. When kids move back home with parents, it puts parents in the complicated position of wanting to support their children while trying to help them launch their own lives. The line between support and coddling can be blurry, experts say.
5. When an adult child says he needs to move back home, parents should come up with a financial plan that includes a detailed budget of the child's expenses and what the child is expected to pay. Those expenses typically include rent, utilities and food.
a. The best way to handle expenses outside of room and board is a weekly or monthly allowance,... a strict limit for how much the child will be able to spend.
b. ... parents shouldn't be paying for extras that a child can live without: new cars, trips or entertainment, for example, even if they can afford it. "Then there's the problem of kids having this entitlement and having no ambition to get off their butts,"
c. The biggest mistake parents make is failing to establish a time frame right away for how long their child is allowed to stay,... Without any kind of parameters, kids get comfortable at home and parents can find themselves stuck.
d. ...parents shouldn't allow their kids to live with them longer than, say, a year and a half, unless there are extenuating circumstances, many financial advisers say. Some advisers recommend no more than six months. The longer children stay, the harder it is for them to leave, and the more the cost to parents soars.
6. And here's how... a "glide path" approach to encourage their kids out of the house.... an initial allowance that will slowly decrease over time. Another way to do it: start by paying some of the child's expenses and then gradually stop paying them
7. Often children move home directly after college with no job in the field they majored in. But children should at least find a part-time job, even if it means they're underemployed,... has to have a job, even if it wasn't in her field.
a. If the child is having trouble finding a job, he or she should find another way to contribute around the house by doing chores or cooking meals, ..." When Your Grown Children Move Back Home - WSJ.com
Great article?
In an effort at full disclosure...I would never set such a plan for my children. I've raised them to be a certain kind of individual...and would allow the fruits of their upbringing to be evident without such as contract.
But....
...it is the plan our nation should institute in place of the current welfare industry.
OK...here is the new welfare system:
"... with no exit plan in sightoften damaging their own financial health and retirement savings.... be firm, by making them pay for rent and other expenses if possible, setting a limit for how long they are allowed to stay,...help them launch their own lives. The line between support and coddling can be blurry,...having this entitlement and having no ambition to get off their butts,...The biggest mistake ... is failing to establish a time frame right away for how long their child is allowed to stay,... Without any kind of parameters, kids get comfortable... shouldn't allow ... longer than, say, a year and a half,... advisers recommend no more than six months.... ... a "glide path".... an initial allowance that will slowly decrease over time. Another way to do it: start by paying some of the expenses and then gradually stop paying them find a part-time job, even if it means they're underemployed,... has to have a job, even if it wasn't in her field..."
1. "Parents, meanwhile, are finding themselves stuck caring for children, sometimes for much longer than they planned, with no exit plan in sightoften damaging their own financial health and retirement savings.... hosting an adult age child back at home can cost between $8,000 a year to $18,000 a year....
a. U.S. Census Bureau figures, 22.6 million adults between the ages of 18 and 34 were living at home with their parents in 2012, about 32% of all people in that age group. That is up from 18 million, or 27%, a decade ago. The percentage of young adults between 18 and 24 years old living with parents has increased the most, to 56% in 2012 from 51% a decade ago.
2. Parents should be firm with their kids, say advisers, by making them pay for rent and other expenses if possible, setting a limit for how long they are allowed to stay, and avoiding the temptation to offer extra financial help, like loans.
3. All of this is weighing on parents' finances.... 26% of parents with adult-age kids living at home have taken on debt in the process, either to help their child with a loan or for their own spending needs. Thirteen percent delayed a life event like buying a house, and 7% delayed retirement.
4. When kids move back home with parents, it puts parents in the complicated position of wanting to support their children while trying to help them launch their own lives. The line between support and coddling can be blurry, experts say.
5. When an adult child says he needs to move back home, parents should come up with a financial plan that includes a detailed budget of the child's expenses and what the child is expected to pay. Those expenses typically include rent, utilities and food.
a. The best way to handle expenses outside of room and board is a weekly or monthly allowance,... a strict limit for how much the child will be able to spend.
b. ... parents shouldn't be paying for extras that a child can live without: new cars, trips or entertainment, for example, even if they can afford it. "Then there's the problem of kids having this entitlement and having no ambition to get off their butts,"
c. The biggest mistake parents make is failing to establish a time frame right away for how long their child is allowed to stay,... Without any kind of parameters, kids get comfortable at home and parents can find themselves stuck.
d. ...parents shouldn't allow their kids to live with them longer than, say, a year and a half, unless there are extenuating circumstances, many financial advisers say. Some advisers recommend no more than six months. The longer children stay, the harder it is for them to leave, and the more the cost to parents soars.
6. And here's how... a "glide path" approach to encourage their kids out of the house.... an initial allowance that will slowly decrease over time. Another way to do it: start by paying some of the child's expenses and then gradually stop paying them
7. Often children move home directly after college with no job in the field they majored in. But children should at least find a part-time job, even if it means they're underemployed,... has to have a job, even if it wasn't in her field.
a. If the child is having trouble finding a job, he or she should find another way to contribute around the house by doing chores or cooking meals, ..." When Your Grown Children Move Back Home - WSJ.com
Great article?
In an effort at full disclosure...I would never set such a plan for my children. I've raised them to be a certain kind of individual...and would allow the fruits of their upbringing to be evident without such as contract.
But....
...it is the plan our nation should institute in place of the current welfare industry.
OK...here is the new welfare system:
"... with no exit plan in sightoften damaging their own financial health and retirement savings.... be firm, by making them pay for rent and other expenses if possible, setting a limit for how long they are allowed to stay,...help them launch their own lives. The line between support and coddling can be blurry,...having this entitlement and having no ambition to get off their butts,...The biggest mistake ... is failing to establish a time frame right away for how long their child is allowed to stay,... Without any kind of parameters, kids get comfortable... shouldn't allow ... longer than, say, a year and a half,... advisers recommend no more than six months.... ... a "glide path".... an initial allowance that will slowly decrease over time. Another way to do it: start by paying some of the expenses and then gradually stop paying them find a part-time job, even if it means they're underemployed,... has to have a job, even if it wasn't in her field..."