Back to the Nest? Tips for Living in a Multi-Generational Household

One in every five Americans now lives in a “multiple generation” household, according to a Pew Research Center analysis. Using data from the U.S. Census, the center determined that multi-generational family living is rising in most age groups and almost every racial group.

A bit of backstory: This is almost as high as 1950, when 21 percent of people lived in households with at least two adult generations or households of grandparents and grandchildren younger than 25. By 1980, the figure was down to 12 percent. During and after the Great Recession, it jumped up to 17 percent and by 2014 it was 19 percent.

So: Living with the folks! Or with the grandfolks! Depending on your interpretation, this could be:

a big step backward for millennials (those entitled crybabies!), or
a great opportunity for young and old alike.

When you consider the crazy cost of housing and health insurance for millennials, plus the fact that many baby boomers still don’t have enough saved for retirement, multi-generational living could add up to a solution that works for everyone.

Young people get a chance to save for places of their own, pay off that vehicle they need to get to work (not everyone has public transit), and maybe tackle some student debt. Additionally, they’ll be better positioned to recover from any rookie errors as they figure out the whole adulthood thing. (Hint: If you make a mess of your finances on your own right out of college, you could lose that first apartment – and an eviction notice doesn’t look good on your credit score.)

Meanwhile, their parents reap the benefits of even a small amount of rent along with the extra pair of hands. Young adults can help with siblings (e.g., babysitting or shuttling them to sports practice or the orthodontist). They can take on tasks that are increasingly taxing for middle-aged homeowners, such as yard work and cleaning out the rain gutters. In households that include grandparents, millennials can provide rides and companionship to their elders (and respite care for those experiencing Alzheimer’s and other health issues).

And, of course, there’s the chance for parents and their offspring to spend time together and get to know one another on a different plane: as fellow adults.

Win-win, right? If you do it correctly. Here’s how.

Figure out why you’re there.

Is it because you want to be, or because it’s the smart thing to do?

If your culture is one that expects young adults to live at home and you feel fine about doing so, then congratulations: You’re staying true to your roots and getting a big financial boost. All the money you aren’t spending on rent and utilities can be used to help secure your future.

And if you wish you could afford to be anywhere but home, but realize this is the best option right now? Congratulations anyway, because you just made a very adult decision: to do the strategic thing and sort out your finances. This is a better choice than trying to make it on your own and winding up in additional debt (and ultimately having to slink back home with your tail between your legs).

Sometimes adulthood stinks. This is one of those times, but it won’t be forever. Speaking of time constraints, you should…

Write up a contract.

Maybe your parents would be happy if you lived there until you get married, or forever. But not everyone’s folks feel that way. In fact, your parents may be a little glum about your return to the nest, because they were just about to turn your room into a man cave and/or take some long-awaited trips.

They might wonder whether your presence will mean more work and expense, or fear the conflict that could result from their need for certain ground rules. For example, having a bunch of your old buddies in the family room playing video games until 2 a.m. might be disruptive to parents who have to get up early for work.

Thus you need some kind of written agreement – one that not only informs, but also protects. It’s all too easy to fall back into old parent-and-child patterns. If they start to grumble about how often you go out, you can remind them that nothing in the agreement says you have to be home every night (or any night). And if you start to get a little too comfortable, they can point out the clause that describes the chores you will do or the rent you will pay.

Wait… rent? Chores? Yes, and yes. The free rides should end once you hit adulthood. Your presence means added utility costs and likely higher grocery bills; if you’re using a family vehicle regularly, their auto insurance rate could go up. Work with your parents to decide which chores will be yours, and how much (if anything) you’ll contribute for rent and utilities.

The contract also needs an exit strategy (assuming your parents aren’t encouraging you to stay forever). Instead of saying, “I’ll leave once I get a good enough job,” specify the steps you plan to take to make this happen. For example:

“I need $4,000 to set up a basic emergency fund and cover rental deposits and moving expenses.
“Currently I have about $600 a month left after my student loan payment, commuting costs, and the rent I pay to you. That means it will be almost seven months before I can safely move out.
“As you know, I’m looking for a side hustle to save the money faster. I’m also looking for a shared-housing situation, and if that happens then I’ll be able to move out sooner because overall costs will be lower.”

Abide by that contract.

It will be harder for your parents to treat you like a flighty kid if you don’t act like one. Thus if your contract says you’ll pay $75 rent from every paycheck, transfer the money or hand over the cash on payday. If you agree to spend two hours cleaning each weekend, do this willingly. Now that you’re an adult, your parents should not have to nag you about shoveling the snow or unloading the dishwasher.

Oh, and don’t ever let these words cross your lips: “There’s never anything good to eat around here.” If you want something good to eat, then shop for it and cook it – and make enough to share.

Learn to deal with conflict.

How easy it is to become a college student again: the golden boy or girl home on break, sleeping in and letting parents take care of all the details of life. Except it’s no longer cute when you’re in your 20s or 30s.

Look at it from your parents’ point of view: There you are – except there you aren’t. Other than showing up for meals, you’re either at work or out of the house. And if you’re leaving a trail of destruction (or at least unfulfilled chores) in your wake, then your folks have a right to be miffed.

Not that they can tell you what to do, outside of the terms of your contract. They don’t have the right to demand that you hang out en famille every night, or order you to accompany them to Grandma’s for Sunday dinner. Which you can politely remind them:

“I’m an adult roommate now, not a dependent. While I’m happy to spend a certain amount of time with family, I have other interests (and maybe a side hustle that keeps me hopping). How can we create a compromise that meets at least some of everyone’s needs?”

About those last two sentences: Much, much better than screaming “You’re not the boss of me!” and slamming out of the house. If you want to be treated as an adult, model some adult behavior. This won’t always work; your parents may have trouble thinking of you as anything except the kid who needed a nightlight and always left wet towels on the bathroom floor. Politely, lovingly remind them that you are all grown up now and that you are living up to the terms of your contract.

If they still try to tell you what to do, you have two options. One is to move out early. The other is to learn to deflect with (courteous) phrases like, “Thanks, got it!” and “I’ll certainly keep that in mind.” Remember, they are doing you a big favor by letting you live there. Now, do yourself a favor by doubling down on that exit strategy. One way to do that is to…

Regularly rethink your budget.

If you really want to move out on your own, then you need to make smart financial choices. Otherwise you run the risk of remaining an eternal adolescent, one who buys whatever he wants whenever he wants it.

A good way to do that is to remember the timeline you set for your parents. Except that it isn’t just for your parents: It’s a launch strategy for your adult life.

So instead of regularly going out for drinks after work or becoming an online shopping addict, set up some simple, smart goals for your money. Lots of people swear by the 50/30/20 budget: Spending no more than 50% of your take-home pay on essentials, 30% on wants, and 20% on saving (including retirement planning and an emergency fund). Plenty of budgeting apps exist as well (some are even free).

As your savings grow and you get in the groove of paying your bills in full vs. running up consumer debt, you’ll be able to plan your move-out. Among other things, you should:

Monitor rents in different areas.
Seriously consider shared housing – the savings can be huge.
Figure out related costs of moving, including but not limited to truck rental, deposits for an apartment and utilities, and the price of any household items you’ll need to buy.

Make up a checklist, and savor crossing off each item. Every task that’s completed means you’re one step closer to self-sufficiency.

Keep that budget private.

In some families, each working person is expected to contribute. Otherwise, your money is your business. Be willing to ante up what’s fair, but don’t let parents take advantage of you because they can’t handle their own finances.

That’s especially true if your dad is hitting the racetrack, or your mother decides a younger sibling should be in a private high school. Suddenly you’re being asked to contribute more than your original agreement specifies. That’s a sticky situation, to be sure, but you cannot jeopardize your own future to shore up the family budget.

No one needs to know everything about your finances. If you’re contributing as agreed upon, that’s enough. While you might want to give more in case of an emergency like illness or layoff, be careful not to give too much. Pay your share, but don’t routinely cover someone else’s obligations. This is your financial future we’re talking about, here.

Keep your parents apprised.

Again, your money = your business. But it doesn’t hurt to let the folks know how that exit strategy is shaping up. When they hear things like, “The nights-and-weekends pizza delivery gig will let me retire that credit card debt a lot sooner than I thought,” they’ll be glad to know you’re making progress.

As you get closer to launch, let them hear more:

“Two more paychecks and I’ll have my emergency fund built.”
“I’ve got utility deposits and first and last month’s rent saved.”
“My college roommate is looking for a fourth person to share his place – I’ll be meeting with him and his current roomies this weekend.”

And if you really want to demonstrate maturity, here’s another thing to say: Thank you. That can be a general, heartfelt, “I appreciate your help,” or a more specific phrasing:

“Your letting me move back home has given me a big financial boost. Instead of having to use a credit card to pay for basic living expenses, I’ve been able to take care of the consumer debt I already had.”

And here’s another thing they might want to hear:

“Because of that side hustle, I’m reaching my savings goal much faster. Your letting me pay such a low rent has made a huge difference in the kind of life I’ll be having later on. But because I’m making more money, I’d like to pay an extra $50 (or whatever) a month toward rent/groceries/utilities.”

That’s another hallmark of adulthood: Paying your fair share vs. taking advantage of someone else’s kindness. Even if your parents refuse the money, they’ll be pleased by the offer.

Veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.”