When adult children move back home

5 tips to avoid intergenerational tension – and protect your retirement plan

Adjusting to adult children moving back home can be challenging, but it’s also a great opportunity to have important discussions about financial planning and budgeting – and instill solid financial habits to help your kids thrive. 


Here are a few more tips to help make your new living arrangement less stressful. 

1. Keep the lines of communication open

Start off on the right foot by clarifying your expectations from the beginning: Do you expect your child to contribute to living expenses and groceries? Do regular household chores? Be actively searching for a job if they are currently unemployed? Listening to each other openly and respectfully will save confusion and ensure both sides are represented and understood.

2. Mutually agreed upon room and board 

Decide up front whether your adult child will pay rent or contribute financially in some other way to household expenses. Charging rent is a good way to help offset added household costs and ensure your adult child doesn’t get too comfortable living at home. If the goal is to help your child get back on better financial footing, you can charge a low rent to start and then slowly build up. Or you can choose to put rent proceeds into a savings account that you will transfer to your child when he or she moves out. 


3. Set limits

Be sure to establish an end date, particularly if you have agreed to provide your child with a financial break for a short time, if you are close to retirement or if you plan to downsize soon. Likewise, you should not be taking on additional debt (yours or your child’s) during this critical phase of your life.


4. Model good financial behaviour

Encourage him or her to build credit, create an emergency fund, stick to a realistic budget and set aside money for investing. If you have a budget, you may want to show it to your child to share ideas and demonstrate that you are also following the same principles. This is also a good time to think about how you are supporting your children. If you’re continually bailing them out when they run into financial trouble, you may not be teaching them fiscal responsibility or how to avoid getting into those situations to begin with.


If you’re finding this conversation challenging, we can help. Contact us.


5. Don't lose sight of your financial goals

Your wealth may provide both the opportunity and the satisfaction of helping your children, but these financial gifts should not come at the cost of your retirement savings. Be aware that your circumstances could change suddenly and drastically due to life events like illness, incapacity or death of a spouse – ensure you’re prepared for different scenarios so your financial plan is not at risk. We can help you calculate how helping your child may affect your short- or long-term goals.


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