Years ago, children graduated from high school, got a job and shortly thereafter got married, bought a home and had children.
This pattern may have been delayed a few years as more and more people obtained college educations, but the pattern remained basically the same.
Now, however, the number of adult children living with their parents has skyrocketed. In fact, as recently as 2010, Calculated Risk shared that nearly 13.5% of individuals ages 24 to 35 lived at home with their parents. This group has even been given their own name—Boomerang Children–because they leave the nest for some time but then return back home, sometimes for years.
If your adult child has moved back in, should you charge them rent?
Why Do Adult Children Move Back Home?
There are a variety of reasons why adult children move back home.
Sometimes it is because they can’t find a job in today’s economy, or they do have a job but the salary isn’t enough to allow them to live on their own. Perhaps they have student loan debt or credit card debt and can’t afford debt repayment as well as living expenses.
Even if your child is not in debt, she may choose to live at home to save money for a down payment on a house.
Sometimes it is because they are simply lazy and can’t beat the free ride at mom and dad’s.
Often it can be a combination of reasons.
To Charge Rent or Not To?
Whether or not to charge adult children rent seems to be a polarizing issue.
On one hand, some parents are firmly against charging their adult children rent because they see it as their parental duty to continue to care for their children no matter how long it takes for them to become independent. They may feel as if they are taking advantage of their children by taking rent money from them, especially if the child is living at home to save for a house of her own.
On the other hand, many parents believe that charging rent helps their children mature and learn responsibility.
My mom fell into this camp.
Fifteen years ago when I lived at home for two years between undergraduate and graduate college, she charged me a nominal rent, about $100 to $150 a month, to live at home. At the time, I was working at a low paying job making roughly $15,000 a year and also paying back student loans from my undergraduate career. Still, I happily paid my rent because I knew what she was charging me was much less than I would have to pay living on my own. What I paid her probably just covered my portion of food and utilities for the month.
Even experts are conflicted about what to do with boomerang kids.
Walter Updegrade of Money Magazine believes that there are times when you should be lenient with your children and not charge rent, stating, “If your son is living at home out of economic necessity — perhaps his salary is just too skimpy to allow him to make it on his own or he’s grappling with a huge load of student loans — then maybe you want to cut him some slack. You could just ask him to chip in for household expenses rather than charging him rent.” (cnn.com)
On the other hand, no nonsense financial expert Gail Vaz-Oxlade of Til Debt Do Us Part fame boldly states, “If you don’t take rent, you’re a bad parent. Yep! You are! You’re abdicating your responsibility to teach your kids (adults) about what life is really like. And you’re letting them get used to indulging themselves way more than they should.” (gailvaz-xlade.com)
An Alternative for Parents Who Feel Uncomfortable Charging Rent
If you want your child to learn responsibility but feel conflicted about charging rent, there is an alternative.
You could charge them a nominal rent of perhaps $200 and, unbeknownst to them, save the money. Then, when they are ready to move out on their own, you can give them that money for a security deposit on an apartment or an emergency fund or partial down payment if they are looking at buying a house. If the child stays with you for 24 months and you charge $200 a month that you set aside, by the time she leaves, you will have $4,800 to return to her to help her achieve her own financial independence.
As you may guess from my own background, I do believe in charging grown children who are living at home rent.
It can help teach your child appropriate money management and budgeting techniques, and it helps them realize that their parents are not giving them a completely free ride. It may even serve as incentive to nudge your grown children out of the home if they simply are too comfortable living there.
However, the decision is ultimately yours as a parent. Just make sure when your adult child moves back in that the ground rules and financial expectations are clearly outlined.