How to budget when your adult kid moves back home


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More young adults are living with their parents than ever. An all-time high 17% of 25- to 34-year-olds reside with their parents, according to the Census.

Parents facing this prospect may feel like they should open their doors, no questions asked. After all, a parent’s job is to help their child. (Check out these 50 ways to teach your child about money.)

But it’s a good idea to prepare for the financial consequences of having another mouth to feed (again).

“It’s really important to keep their financial situation in mind, especially if they’re retired or they’re near retirement,” said Christina Newberry, author of “The Hands-on Guide to Surviving Adult Children Living at Home.”

While the earning potential of a 25-year-old is still in front of them, parents’ ability to earn enough to meet their financial goals is more limited. While your heart may say to help all you can, you should be honest about the cost of taking on another member of the household. (Check out this financial guide for parents to learn more.

Here’s how to get your budget ready for your adult child coming back home.

What to do ahead of time

“It’s really important for parents and adult children to get their expectations in line,” Newberry said.

Adult children shouldn’t assume they’ll get a free ride. Parents should know they’ll face higher costs in terms of grocery and utility bills.

Parents should go through their monthly budget to get a sense of what their costs are before their child moves in. From there, it should be easier to estimate how another person might increase those costs.

Make a new budget

The obvious increases will come in your food and utility budget, but having another person at home might also necessitate a change in the phone or cable plan. Parents and children should talk through all the potential costs.

“It’s a really good idea for parents to sit down with their adult children and work through this budget,” Newberry said.

Then they can discuss how much the adult child can contribute, depending on their income. Newberry believes charging rent is appropriate in most cases, even if it comes in the form of work around the house.

After all, adults have to face financial responsibilities and it’s important to get in the habit of recognizing that.

“It does help parents with extra costs and it’s good for the adult children’s self esteem to financially contribute to the household,” Newberry said.

Even if parents don’t need the financial help, they can set aside the rent money they collect and return it once their child moves out. This way, parents are helping their child while still teaching them financial responsibility.

You can use this free easy budgeting template to help set this up.

Write a contract

It’s a good idea to get the budget down in writing, along with an expected move-out date and any other goals for the adult child to accomplish while they’re at home. There’s obviously nothing legally binding about this contract, but it can help to have something on paper in case of any disputes, Newberry said.

Plus, having a move-out date in mind can help everyone remember the end goal: to help your child become an independent adult.

This article originally appeared on Policygenius and was syndicated by

Featured Image Credit: DGLimages / iStock.


Myles Ma

Myles Ma is an editor at