Do Adult Children Owe the Family a Contribution?

Due to a multitude of reasons, adult children are moving back home with their parents at increasing rates.

A Pew Research study revealed that in 2020 about 52% of young adults were living with at least one parent.

When families consider the switch, one of the first questions that pop up is whether adult children should pay rent and household expenses.

The answer, of course, depends on the circumstances. The rules for 20-year-olds living at home look very different than 40-year-olds or elderly parents moving in with their children.

But generally speaking, it’s smart to work out a contribution agreement. Why?

    • Responsibility: Paying rent or mortgage is part of adulting. Sure, some people luck out and have properties handed to them, but most of us must pay our way. If your child is moving back home because of financial hurdles, submitting a small monthly stipend gets them in the habit of paying rent while also shielding them from real-world consequences if they mess up.
    • Lessens Resentment: Whether you admit it or not, resentment can metastasize and fester if your kid starts freeloading — especially if they’re working. Financial contributions to the household will make parents feel better about the situation.
  • Self-Esteem Booster: If the adult child moving in has had a hard time getting their act together, getting into the routine of successfully paying their own way can do wonders for their confidence. Our bodies release feel-good chemicals when we achieve a goal. Building on that positive feedback can help a person dig out of a rut.
  • The Greater Good: Everyone pays less when more people contribute to a pot. After all, three people contributing is better than one or two. Use the saved money for things you need or want. Or, you can stash it away and watch the interest grow.

Other Financial Considerations

You should take individual circumstances into account. Is your kid moving back home because they lost their job due to an economic downturn in their industry? Under those circumstances, you may not want to charge them the going rate in your area. After all, they are your kids, and parents helping their offspring get up after a fall is fine.

If you, the parents, are financially secure, think about creating a secret savings account for your kid. Their monthly rent goes into the bank or a portfolio.

When it’s time for them to move out, present your child with the little nest egg you compiled on their behalf.

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