Adult Kid Back in the Nest?

Right now, people are taking lots of precautions to stay safe and slow the spread of the coronavirus. All around the world, people are adjusting to the new changes in daily life. People are working from home, many K-12 schools closed their doors, and large events such as family reunions and weddings are on hold for the time being. This is causing many adjustments in our home lives. Maybe in your case, your adult child has moved in with you to save some money until they find their next job, or your 20-year-old came home to complete the rest of their college semester online. Whatever the case, your grown child is living back at home. Here are some tips to get your kid back on their feet while living together peacefully in the meantime.

Clarify your expectations early

It’s important to communicate your expectations right away to place the two of you on the same page and decrease future misunderstandings. Make sure your ground rules are clear before your adult child moves in. Some things for discussion include how you plan to share financial responsibilities and household tasks. Will your child have an obligation to pay for groceries, utilities, or rent? If you currently cover any expenses for your child, such as car insurance or phone bills, will you continue to do so? What will be the course of action if your child damages something in the home? Is your living situation that of parent-child or one that more so mimics two roommates? Discuss all of this ahead of time to set guidelines that will make you both happy.

Develop a financial game plan

Hopefully, your adult child has a plan in mind regarding how long they need to stay with you and what goals they want to accomplish by doing so. Living at home can help your child save money and put them in a better financial position if and when they decide to leave your nest. It also helps them further develop discipline and responsibility. If your child doesn’t have financial goals before living with you, encourage them to figure out their timeline considering the following:

Create a budget

Budgets will give your adult child a realistic view of where their money goes. Without one, it’s easy for her to spend more than she anticipates. Some good budgeting apps are Mint by Intuit or YNAB (You Need A Budget).

Build an emergency fund

Once your child knows how much he spends each month, he should begin saving three to six months' worth of his living expenses to an emergency fund. It can serve as a funding source for a security deposit on a new apartment, cover food and utilities in the event of job loss, or even pay for his deductible if he's in a car accident. If the goal is for your child to move out, it's wise to have him calculate and share with you how long it will take him to reach his emergency fund goal.

Work on debt

Many young people today are beginning their financial lives by first going into debt and growing their net worth later. It is common to have student loans and perhaps a car loan too. On top of that, about a third of young adults have some form of credit card debt. Because of this, it might be beneficial for your child to live with you for a period of time so she can aggressively make a dent in her debt.

Establish credit

If your adult child doesn’t have loans, it's a good idea for him to begin building his credit history. A starting place can be getting a credit card with a low spending limit. Be sure he knows not to use more than 30% of his available credit limit at any one time and to pay it off each month to avoid incurring interest. Not following these guidelines can negatively impact his credit score rather than building a history of responsible credit usage.

Discussing your child's budget, emergency fund, or debt repayment plan together can be helpful whether her or your intention is for her to move out or not. It provides accountability, sets her up for a brighter financial future, and hopefully, reduces any disagreements that might arise between the two of you. 

Have patience and respect for one another

Living together will likely cause you to butt heads at some point, so be prepared to communicate clearly and respectfully. You may find your child has some different lifestyle choices since the last time they lived with you, like questionable dinner recipes or new religious practices. No matter how you choose to respond, keep in mind this opportunity to spend time together under the same roof won’t last forever. This new arrangement is an adjustment for everyone and an ounce of patience will likely go a long way. Before you know it, they’ll be using their wings to leave the nest again.