When Carol Weis’ daughter graduated from college in 2006 with a degree in sociology, she didn’t have a job waiting for her. So, she got a lackluster retail gig and moved into her mom’s Massachusetts condo. At the time, Weis, who works as a substitute teacher and editor, says she wouldn’t have dreamed of charging her daughter rent.
“I was a perfectly codependent mom,” says Weis with a chuckle. “I always stepped in and took care of her—maybe because I felt guilty that her father left us when she was six years old.”
Weis’ daughter is now 29, and seven years later the two are still living together. But, as her daughter got better-paying side jobs in between studying for her master’s in social work, Weis knew it was time to broach the idea of having her make a financial contribution—if not rent, then at least splitting the household bills.
“Initially, she wasn’t thrilled about the idea of paying for some of the bills,” Weis says about her daughter. “But she knew it was the right thing to do.”
Today, the two split the bills for electricity, water and the rest of their utilities.
To Charge or Not to Charge?
From sharing the utility bills here and there to paying rent every month, when your adult child moves home, should you ask him or her to contribute financially? It’s a thorny question many parents are grappling with these days.
Consider the numbers: 21.6 million adults between the ages of 18 and 31—or 36% of people in this demo—lived at home with their parents in 2012, according to the August 2013 Pew Research Center report “A Rising Share of Young Adults Live in Their Parents’ Home.” This is the highest share in 40 years.
Experts call these children “boomerang kids,” and when a grown child moves back home, it’s important to make sure that everyone is on the same page, says David Blaylock, a CFP® with LearnVest Planning Services. ”The first conversation that needs to happen is resetting boundaries. Keep in mind that they were probably in high school when they last lived at home, so they shouldn’t be returning to the exact same rules as when they left,” he advises.
As for paying for the privilege to move back in, Blaylock believes parents should charge a nominal fee for rent, but one that’s way below market rate. “I would advise that parents not charge more than 10% of the child’s take-home pay,” he says. “The amount should be enough as to feel like a responsibility, but not so much as to be a burden.”
Parents Who Make Them Pay
Sherman Ragland, a father of three, wouldn’t dream of not charging his adult daughter rent, especially since his rate, $450 per month, is a fraction of what she’d pay if she lived on their own.
His oldest daughter worked in retail while she was in college. When she graduated in 2009, she had her own apartment and worked a full-time job at a major department store chain. But a few years ago, she decided to switch careers to government contracting, which would mean taking a pay cut. “We suggested she move in to save some money,” says Ragland of his now 26-year-old daughter.
He is far from a traditional landlord. In fact, he still thinks of his primary role as being that of generous father. Case in point: What his daughter doesn’t know is that he has been setting aside all of her “rent” in an account for her to have once she’s ready to move out.
Blaylock isn’t necessarily a fan of this setup. “Instead of saving the money without the child knowing about it, you’re missing out on a teaching opportunity,” he says. “The goal is to help your child manage her assets better, so talk about why you’re putting the money aside. Otherwise, it’ll be like Mom and Dad to the rescue again … ‘Here’s this big pile of money!’”