Have your adult kids made their way back to you and started living at home once again? If they are, you’re not alone. New research shows that 34% of Millennials (18-34 year olds) in Ohio are living with a relative, while almost 33% in Indiana, and 30% in Kentucky. And when the kids come back, this means your family budget could take a hit.
Think about it. You probably thought once the kids moved out and graduated, they were gone for good. And you probably adjusted your household budget to reflect that change, hopefully by saving more for retirement. But now that they’re back, your bills are probably going up again. Food. Water. Electric. In fact, one child moving back home can cost you an extra $8,000 a year! That’s money that could have otherwise been going to your retirement!
If this scenario sounds a little too familiar, the first step you need to take is to reassess your budget. Don’t get yourself (or future self) into financial trouble or knock your retirement planning off track because your kid(s) moved back home.
Next, be sure to set some ground rules. Consider having them pay something in “rent,” or chipping in for food costs. Set-up a schedule that outlines how (and when) they will move out. And consider putting conditions on any other types of money assistance: “I will only give you a loan if I see you do X,Y,Z.”
The Simply Money Point
There’s a tricky balance between helping your kids get a financial foothold in life while not creating a long-term dependency. Above all, you should not be jeopardizing your future and your retirement if they move back home. As they say in the pre-flight safety presentation on planes, you need to secure your own oxygen mask first before assisting others – in other words, always pay yourself first.
If your adult kids have thrown a wrench into your household budget, our team at Simply Money Advisors can take a second look for you.