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It’s graduation time, and many college graduates are returning to live at home for the first time in several years.
Once upon a time, many of these graduates quickly moved on to their own digs, but today that trend is changing. Because of an uncertain economy, many young adults have decided to spend a few years living with Mom and Dad until they have a stronger financial foundation. Others are seeking a way to minimize living expenses while they pay off hefty student loans, attend graduate school or save for a down payment on a home.
Families may have a lot of unspoken questions about how the new living arrangements will work, so it’s best to discuss everyone’s expectations in advance. For example, will the child be expected to pay rent? How much will he or she chip in for groceries and other expenses? If your child’s initial income is very low, you could consider charging them a token percentage of that income or asking them to take on certain household responsibilities, such as shopping or yard work. That’s a realistic way for your child to make a contribution despite their limited funds.
You’ll probably have other issues to consider beyond the economic ones. What chores will the child be responsible for? Can the child stay indefinitely or is there a time limit to the arrangement? Parents should discuss these and other questions with their children before they move in. You might even consider writing up an informal agreement that covers all of these details so there are no misunderstandings later.
It’s certainly possible to live harmoniously with your adult children, but you may have questions about managing the financial aspects. Your local CPA can help you understand and address these and other financial concerns facing your family.
To listen to podcasts with more financial tips, go to http://www.calcpa.org/Content/community/financialempowerment.aspx.