Money Matters

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Successful Money Management in a Multigenerational Household


When Parents Move In Your parents have probably spent years thinking about the freedom their later years will give them, so having to live by someone else’s rules – even a loved one’s – can take some adjustment. Using the tips below can create a more comfortable dynamic for family money decisions.

Create a new budget – Any time more people join a household, additional expenses are inevitable. Doing a budget to identify these changes will help to make it clearer what these expenses are and how to deal with them. This is also a good blueprint for taking a team approach to tackling the newly expanded bills and starting a discussion of what your parent or parents feel they can contribute, if in a position to do so. Additionally, if you’ll need to spend on your parents’ medications, doctor visits, or other forms of care, completing a new budget will help you get a grasp on how these new expenses will impact your finances. Lastly, talking about money with your parents in this type of setting can help you get a better understanding of how their finances are in general. If your parents seem to be stressed or confused about their money, this can be an opportunity to offer them help.  A great way to map out a budget is by using an app or online tool.  Your Credit Union has an easy, expert budgeting tool that makes light work of the task.  Check it out here.

Draw up an agreement – This might seem overly formal for a family setting, but having an agreement about financial expectations can help you to avoid conflicts down the road. While it doesn’t necessarily need to be posted on your parent’s bedroom door, it is a good idea to keep it somewhere it can be accessed if questions come up about the initial arrangement.

Create time for review and input – On your family calendar, mark a day at least once a month when you can talk about finances. It can help to schedule this meeting immediately after an activity the whole family enjoys doing together, like going for a nature walk or watching a movie together. You can also use this time to go over any budget or financial figures that may need adjusting. Having a meeting like this can also be a great way to teach any younger children that may still be in the house about how family money decisions are made.

Have fun money conversations too – If financial conversations always revolve around cutting expenses or contributing more to necessities, these little talks will always be looked upon with dread. Including your parents in discussions of how money will be spent on fun family activities will help to create an environment in which money talk doesn’t always have to be a bummer.

If you run into trouble, seek help – If you find that your parents are struggling to meet their financial obligations, a positive solution is to seek help from a neutral third party who is trained in helping families with their finances. A financial counselor can help you analyze your situation and make recommendations for creating a financial plan that will help meet everyone’s needs.  Your Credit Union is also here for you―feel free to chat with us any time on any financial issue or concern.  Also learn about our Financial Wellness Check – an easy, relaxed, no-commitment way to assess your financial situation and needs with one of our experts and find ways to save and earn more.

When Adult Children Move In
In addition to all the above steps, living with an adult child requires a little extra effort since your houseguest may still be trying to map out a financial future.

Take advantage of the time together – Your child may find it difficult to create structure in the new living situation. By creating a joint time to work on your respective money management plans, you’ll not only make sure the changes in household expenses are addressed but create an opportunity for your child to create a plan right alongside you. To make this as easy as possible for your child, set a time to do a spending plan session and start to gather the resources for you and your child to make the planning easier.  This will include: financial statements (or laptops or mobile devices if those are used to access statements), recent receipts from the grocery store, gas station, and other places of recurring expenses, and recent income stubs. Creating an environment in which finances are talked about in an open and constructive way can make it easier to start talking about creating a stronger financial present and future.

Consider setting cash flow guidelines – No matter whether you are giving money to your child or your child is contributing money to help pay for expenses, think about setting some guidelines for this exchange of funds. Setting monthly standards for contributions expected in either direction can help to reduce friction in the future. Seeking input from your child on what they consider appropriate can also help to make your time living together go smoothly.

Have a “big picture” plan in place – In conjunction with the agreement to address month-to-month expectations, it is important to have a plan for the future. How long does your child plan to live with you? If the child is unemployed and looking for a job, what are the expectations for the job search? If the idea is to work and save money to become independent, what is the savings goal? Addressing topics like these will help make it clear where each of you stand and hopefully avoid misunderstandings in the future.

Focus on using the time wisely – An adult child living with you may be going through a challenging time, whether it is recovering from a divorce, struggling to find work or a place of his or her own, or rebounding from a personal crisis. Your child may see this as a time of frustration, but it can also be an opportunity to work on areas of personal finance that might be more difficult or time-consuming to work on later. For example, if your child has debts that need addressing, it can be easier to work on these while housing expenses are relatively low. There tends to be more money available for paying down credit card balances or making settlements on older debts when making a mortgage payment is not a concern. Living with parents can also give an adult child new perspective on life goals, so this time can be used for building toward those dreams.

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