When Your Kids Move Back Home – And Take Your Money
When you work hard to save for college and send your kids off to get a degree, your hope is to set them on a path where they become functional, financially independent adults. But what if your grown kids decide to move back home after college – and then require financial support?
It’s not just a matter of failing to launch.
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Oxford Economics reports that recent college graduates account for 12% of the rise in the national unemployment rate since mid-2023. And it’s not because recent grads are getting bogus basket-weaving degrees. If anything, they’ve been overzealous in pursuing degrees in fields where hiring has waned (thanks, AI and tech). Compounding the issue is the stubbornly high cost of living – one that many college grads with entry-level salaries at best can’t afford. The typical rent price today is 21% higher than it was in January 2021, according to Apartment List.
It’s no wonder, then, that so many college graduates are moving back home after completing their studies. And it’s not just people with fresh diplomas in hand who are showing up at their parents’ doors asking to take up residence in their old bedrooms. A good 46% of parents have adult children aged 18 to 35 moving back home, according to a recent Thrivent survey. You may be willing to welcome your grown children back home with open arms – or not, depending on how much you’re enjoying an empty nest. But it’s one thing to put a roof over your kids’ heads temporarily as they figure out young adulthood. It’s another thing to offer up financial support. And it’s the latter scenario you need to be very careful about.
Know where to draw the line
Letting your grown kids move back home won’t add to your mortgage costs. And the increase in utility bills may be minimal. It’s expenses like food and auto insurance you need to be careful with. Feeding another adult human could cost you hundreds of dollars per month, as could adding one to your auto policy so they can drive the family car. And if you’re footing the bill for auto insurance for a grown child’s car, as well as car payments and other expenses, you may be doing your retirement a huge disservice. If you have millions of dollars socked away and you can afford to spend some money supporting a grown child who’s moved back home, go for it. But be honest about your financial situation first – with yourself and any child who’s looking to become your new roommate. If you were hoping to spend the next seven years catching up on 401(k) contributions and paying extra into your thrice-refinanced mortgage in the hopes of getting rid of it in time for retirement, then now’s not the time to be taking on the expense of supporting a grown child. You can provide that child with shelter, a warm shower, and all the Netflix they can handle. But beyond that, you may want to draw the line.
Have those tough conversations
It’s natural to want to help your grown kids financially. But having a child move back home after college shouldn’t get in the way of your financial needs and goals. So sit down with any child moving back home and set some ground rules. If you can’t afford to cover their living expenses plus your own while they look for a job and get settled, say so. Your 22-year-old can fetch food for DoorDash or work retail or pour coffee until they’re able to secure a job with benefits and a steady paycheck. The burden of paying their bills does not have to fall on you. You can also be honest about how much you value your privacy, space, and quiet. If having a recent college graduate move back in doesn’t align with those plans, set an end date for their extended stay.
Wanting your home and your money to yourself at a certain age doesn’t make you a bad parent. And offering a grown child indefinite housing and financial support doesn’t necessarily make you a good one. Recognizing that could make your life worlds easier when your college graduate comes knocking with suitcases in tow.
