Kids back home? Don’t drain your bank account
Months after graduating from college, your child is still searching for that first gig from a second-floor bedroom of your home. As they plug away on applications, you’ve been covering the groceries, pizza takeout, gas for the car, their smartphone and internet bills. All these expenses are slowly draining your checking account.
Sounds like the right time to talk to your graduate about money. No matter how awkward it may seem, set some priorities, ground rules and goals on how to deal with their part of the household budget.
Not since the final days of the Great Depression have so many young adults lived with their parents, partly because of a challenging job market caused by the pandemic.
In July, for example, more than 50% of young adults ages 18 to 29 resided with one or both of their parents, according to an analysis by the Pew Research Center. That surpassed the previous peak of 48% in 1940, according to Pew’s research.
Taking a deeper dive, the number of young adults living with their parents cut across all major racial and ethnic groups, men and women, metropolitan big city and rural residents, Pew noted in its widely reported analysis.
Sure, moving back home after college with the parents is a less-than-ideal situation for everyone.
You want to help out until your child lands a job and travels down the road toward financial independence. Your child may be embarrassed about being back with mom and dad.
Many parents don’t mind covering groceries and other regular household bills, as long as they have the means. But with the pandemic stretching into the new year and a long road still ahead, many families’ budgets are being pushed past their limits.
Many parents don’t mind covering groceries and other regular household bills, as long as they have the means. But with the pandemic stretching into the new year and a long road still ahead, many families’ budgets are being pushed past their limits.
Whether your child has been back home since June or moved back after graduating in December, addressing the money topic with your son or daughter as soon as possible could prevent a ton of problems later. Some talking points:
It all starts with agreeing on a goal. For example, if the game plan is to help your graduate save enough money to move into their own place while hunting for work, then charging rent for living under your roof might be counterproductive.
Perhaps it’s time for your young adult to look for part-time work until a better job opportunity arrives. Reconnecting with a summer employer could yield an offer. At the very least, it’s a way to stay engaged in the workplace and get a regular paycheck. Part-time work might also encourage your child to ramp up their job search.
Review health and auto insurance coverage. If your child has remained on your policy since graduating, it might be time for him or her to line up a short-term health or auto policy. Run the numbers.
If you want your graduate to share some of the bills for food, faster internet and keeping the gas tank full, set some ground rules (make sure you put them in writing). Or, broach the idea of your child taking over some of the chores to keep the house and the yard tidy.
Whatever comes out of this situation, it’s a great starting point for having regular, healthy dialogues with your kids about money and budgeting.