Your Adult Child Is Moving Home: Should You Charge Rent?

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Ragland, a real estate investor in the Washington, D.C., area, believes older kids can also pull their weight in other ways. His daughter and 22-year-old son (who also lives at home while he finishes up his college degree) do chores alongside his 12-year-old son. “They do dishes and contribute to the running of the house, but they don’t pay a cent for food,” he says. “That’s a definite perk to living at home again.”

How Moving (Back) in Can Help Kids Out

Mary Dell Harrington, a writer in Westchester, N.Y., who covers these topics on her website, Grown and Flown, welcomed her 23-year-old son to live at home—rent-free—when he graduated from college in May and was interviewing for jobs. During the day, when he didn’t have an interview, he did work around the house, whether taking care of the family dogs, being home to greet the occasional appliance repairman or getting dinner on the table.

“The only problem with his dinner prep is that he loves spicy food and used Tabasco sauce a little too liberally for some in the family,” she jokes.

Harrington sees no downside to letting her son live with her without chipping in financially, especially since he recently got a job and will soon move out of the house.

“If he was living at home long-term, he’d have no idea how expensive it is to maintain an apartment, pay utilities and buy groceries,” says one mom.

Thanks to their setup, her son has been able to save up for life on his own. “If he had to immediately begin paying for all of his living expenses in New York City where he works, it would be way more difficult for him to get on his feet financially,” she explains. “With a financial cushion of money he saved living at home, he’ll have a running start.”

She admits, however, that if the rent-free living arrangement had been more permanent, her son would have an unrealistic sense of money management. “If he was living at home long-term, he’d have no idea how expensive it is to maintain an apartment, pay utilities and buy groceries,” she says.

RELATED: Can Paying For College Actually Hurt Our Kids?

A Second Chance to Bond?

Bill Parker, an accountant in Scottsdale, Ariz., invited his 23-year-old daughter to move in with him two and a half years ago, when she had to drop out of college after becoming sick and being unable to keep up with her workload. Parker says that their time together has brought him endless joy—not to mention 25 percent of the rent. (He didn’t do a 50-50 split because he makes more money than his daughter.)

“I got divorced from her mom almost seven years ago, so I see this as a great opportunity to bond with her under less stressful circumstances,” he says.

Parker says asking his daughter, who works as a marketing assistant, to contribute to the rent wasn’t tough at all. “I explained that the rent she’ll pay me is less than what she would pay if she lived with friends,” he says.

RELATED: Top 5 Cities Where Kids Move Back In With Their Parents

In addition, his daughter also helps pay for half of the groceries and half of the utility bills. “I want her to feel the pain of turning air conditioning up, leaving lights on, etc.,” he says.

At the end of the day, he couldn’t be happier. “This has probably been the best two and a half years of our relationship,” he says. “We have grown closer than we ever were.”

What remains tough: The fact that he worries a lot—maybe more than if they weren’t living together. “I worry when she’s out at night,” he says. “But I wouldn’t change a thing. Having her live with me will be a memory I keep for the rest of my life.”

And that’s something else to keep in mind when a child moves back home: It doesn’t have to be a bad thing. “It’s a second chance,” says Blaylock. Not only can cohabitation bring parents and children closer, but it can also give parents another opportunity to teach their children some of the money lessons that they might’ve skimmed over or skipped entirely when they were younger. “Parents can even accept some of the responsibility for what’s going on and say, ‘Maybe I didn’t do such a good job of teaching you this stuff when you were 16, but let’s start now,’ ” he suggests. “That way the kid doesn’t feel like a failure.”

RELATED: 7 Steps to Setting Your Kid Free Financially

As for Weis, there is now an end in sight to her cohabitation with her daughter. “She can’t wait to move out,” she says. “We may be best friends, but we both agree that it’s time we had our separate lives. Luckily, for now, she has the upstairs and I have the downstairs—that’s how we’ve made this work.”

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment advice. Please consult a financial adviser for advice specific to your financial situation. The people quoted in this piece are not clients of LearnVest Planning Services. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

  • http://www.adsactly.com/t/adsactly Micah Wallace

    Excellent Article many parents will find this very informative thank you!

  • sam_the_cat

    I think that 10% of their take-home pay sounds very reasonable. It will foster a more adult relationship, preventing the child from feeling like a mooch and preventing the parents from feeling taken advantage of while still allowing the child to save up some money.

  • betty marie waldeck

    my parents would not do that for me they are selfish and do not know how to budget their money.

  • Steph

    Too bad the reason many people have to move back home because our parents generation messed up the economy. Also most of our parents lived at home rent free until they got married in order to save up to buy a house but now we’re being blamed with not buying enough houses.

  • Smitty Jl

    Absolutely they should pay rent and do chores. Teaches financial resp and keeps them frm getting to comfortable. Otherwise they will never move out.

  • Marissa

    I live at home and contribute $500 rent per month. This covers my portion of the cell phone bill, car insurance, and some extra cash that can be applied to bills or groceries. I help out with dinner, dishes, taking care of the dog, etc. Its a great living arrangement and I would rather pay my mother rent than some sketchy landlord.

    • emmaly

      You are very lucky to have a split phone bill and auto insurance! Not trying to talk down to you in any way, I just hope you realize what a great benefit this is & put the money you’re saving to good use :)

  • LIDARKSIDE

    How is this even a question. In my day, adult children had to pay rent. Today, my adult children have to pay rent. Ten percent of their pay is ridiculous. That wouldn’t even begin to cover the additional expenses the parents would have to incur for the adult child to live there–electric, water, sewage, food, etc. It’s usually around 25% of their pay as a rule of thumb. I go with 20% or $100 per week, whichever is less. I was already paying $30 per week back in 1981. In the real world, 10% of their pay won’t even begin to pay for all of their expenses. Your supposed to help them out, not get so spoiled by the lack of expenses that they never go out on their own.

    • oldschool

      I totally agree with you. I too am shocked that this is questioned. I started paying rent as soon as I turned 18 (1989). I worked part-time and made $6.25 an hour. My rent was $130 per month, which did not include car insurance or the car payment I had to pay because my dad got me a car for graduation (that, even though I am grateful, really didn’t have the money to afford). I lived on $12.50 per week for spending money. I can’t believe how spoiled and entitled kids are today!

      • Enabled

        Blah blah blah, this generation is the worst, blah blah blah. Let me just point out who is raising this generation.

        • Raised my kids with respect

          Perfect example is your attitude ‘Enabled’.

  • imdb

    Mr. Ragland, you rule! As long as our children are hand fed, they will continue to take what we give. I work two jobs, and attend school. That’s my reasoning behind everything now. If I can do this, you can too, and pay rent. And Mr. Blaylock, do you have adult children at home?

  • ArchieBunkersBoomeranger

    I lived with my parents after college many years ago, as my username suggests. I paid half the household bills, although they were reluctant to take the money, simply because it made me feel more grown-up and more comfortable about living at home.

    But they took all the money I gave them and put it in a brokerage account in my name. This kept on growing after I moved out, so that when I lost my job at age 64, I had over $250,000 outside my 401K. This means that instead of raiding my 401K and taking reduced Social Security benefits, I can live on the brokerage account till I’m 70, and then begin my Social Security and 401K.

    If you don’t need your child’s rent money, you might consider taking it and investing it. It will benefit him greatly to jump-start his retirement savings when he’s fresh out of school.

  • momofthree

    Of course, they should pay rent. If they are adults they should contribute to the household. My daughter, age 23, pays $300. a month, for room & board. That’s a pretty good deal for her, since over half of it goes to her share of the food. This does not include her cell phone, her transportation, clothes, Starbucks lattes, etc. Oh, and as part of the deal, she agrees to put 10% of her earnings into her IRA, and 15% into her savings. That still leaves her, on a minimum wage job, plenty of $ to spend on herself. (A lot more than I have!)

    • Enabled

      Maybe the lesson should be that she shouldn’t buy Starbucks lattes when making minimum wage at the age of 23….

  • Paul

    A portion of my first “real” paycheck went to my first rent payment. A lot has to do with the “goals” of the adult kid. If they’re in limbo they need to pay a good portion of their income. If they’re saving up to buy a place (and actually saving the $$) then cutting back might be a good idea to help out.

  • Mc Fire

    American parents and their way of teaching their kids “financial responsibility” by making their kids pay rent is ridiculous. If you don’t need the money, don’t charge them. If you do, save it for them. Taking money from your kids for “rent” means you’re just greedy. Their bedroom would of be left spare anyway if they didn’t move back home. I lived with my parents after college for 4 years so I could pay down student loans and save money for a house. In those 4 years, I was able to pay off my student loans (12k) and saved ~20k for a house down payment. I wouldn’t of been able to do that if they were charging 500 bucks a months. Thank god my Asian parents don’t follow American culture.

  • ellie

    Wow. Im shocked to hear so many people blaming their
    folks that they have to pay rent. You are misinformed our generation lived home
    until marriage or lived home to save $ for a home. Most of us worked for a good
    period of time, rented and saved until our first home purchase. Many of us had
    parents who couldn’t wait till the kids graduated high school so they could
    move and retire someplace affordable. It was ‘sorry kids its time to fly’.

    We are in a different day and age. Adult children are in debt like never before with increasing education costs, parents can no longer do it
    all. Multiple incomes are needed to maintain a single household these days,everything has doubled since the day I bought my home, taxes, heating fuel
    ($4000 this winter alone!!) food! Its nearly impossible for a young adult to make ends meet on their own especially with student loans looming over their
    heads. If everyone wants to remain in the family home it makes sense everyone contributes and benefits. Is it that unusual?

    I have 2 adult children at home. The oldest, a college junior at the time, moved home pregnant 8 years ago. Yes I now have a 7 yr old grandchild home as well. My son moved back home 2 years ago after 4 years in the military and a year away at school. She pays $500 mo (2 people) and he pays $400 mo.

    Maybe this seems like a lot to you… but consider this. I would have long ago sold this big old house had they not all moved back home. Its too big, too much work and too expensive for just the hubby and me. Life would be much simpler and affordable if we sold and got a condo with ONE EXTRA bedroom for GUESTS lol.

    So forget the fact ‘the kids’ share 1200 sq feet in a downstairs apartment, they are lakefront with a lovely view, their own porch and entrance (we dont need to see each other for days if we dont want lol.)

    The miscellaneous things provide in the household they have access to a normal tenant would have to provide for themselves. To name a few food/meals, internet,
    cable, heat and electric, washer/ dryer, grill&propane, water of course but beyond! There are things they very rarely if ever supply/replace for the household. They take/use, stamps, light bulbs, laundry detergent, paper/plastic products, and don’t get me started on
    the bottled water and batteries!! All the same things youd expect from having your children home, whatever the age. Someone ate my leftovers, left dirty
    dishes, left clothes in washer….

    And it will break my heart when someone finally flies the coop im sure. Such is life.
    But seriously, they are well aware they have the better end of this deal. And they are grateful they know a certain amount of their income is designated for rent.

  • https://www.facebook.com/NoKidsNoProblems ChildFree Feminist

    I have to pay rent yet my mother was never charged rent. My grandparents are still pissed at her for what she’s doing. And she’s married. She’s been married for double digits. It’s not like she’s a single mom. I’m still a young adult…

  • martha

    . I always look at the bottom line. What do I want for my child – I want them to become responsible adults who don’t feel that they are entitled to everything in life and I want them to earn a living the honest way. And to do this I have to make her realize that life is not a free ride, we all must contribute. She wants to use all of her disposable income on designer clothes, expensive makeup, trips and her expensive hobby of skydiving. Why should she do all of this while I watch every penny my husband and I make, so she can have whatever she wants and live rent free? I personally think it’s a selfishness or guilt on parents’ part when they justify letting working kids live at home for nothing or next to nothing. We are not our kids’ friends, we are their parents – they are looking for and need our guidance – even if this means we are not going to be popular, they will thank us for it in the long run.

  • Melba Von Eye

    I have three adult children living at home, one with two kids and frequent “spending the night” boyfriend. I would like to hear from the ones who say it is selfish and greedy for parents to charge rent. This seems to be my kids attitude. I am a single mom, and this is an awful lot of people for me to be supporting all by myself. I am drowning in debt and can never afford any extras beyond basic necessities, but I make good money for a woman my age. They do a lot of going out and use a lot of gas driving to far away places. I don’t understand how they think that this is fair. Plus, I have to be ready to have guests at any moment because they bring people over all hours of the day and night without warning. I want to charge 300 a month each for rent. This does not even pay the extra food and electricity. Why do they think that this is greedy?

    • Raising my kids with respect

      It is not greedy, Each of them should be paying at LEAST $300 and the one with 2 kids more. Having 3 adult children living at home should tell you something. Tough love.

  • Raised my kids with respect

    My 25 year old returned last year and pays $100 a week, but also he covers his own expenses, car, gas, insurance, cellphone, etc. If he lived outside the home, he would pay much more than this. When he becomes gainfully employed after his internship it will go up to 35% of his take home. The home expectation is he is to respect those in the home, clean up after himself including his room, and assist with chores in the common areas without being asked. $100 a week technically does not cover his monthly expenses. Fair? You bet, more than fair! I did not raise a deadbeat, and if he cannot afford $100, he should not have a Iphone.

  • Doll

    If their claiming you as a dependent why should you have to pay them rent? It’s 3,900 dollars a year for claiming someone as a dependent.

    • Doll

      If someone has to move back home it’s because they’re probably being claimed as a dependent and if you’re being claimed as a dependent by someone it’s hard to make enough money to financially support yourself. If someone claims you as a dependent their telling the government that they are your primary financial support. All someone has to do is change their W4 Form and nobody double checks to see if someone’s a dependent. It’s an automatic raise for the person who’s claiming you, nobody double checks it. It’s easy to get part of someone’s pay or their tax return money. It’s easy theft.

  • 2 Way Street

    I am a frustrated parent. My adult child is a full time student with a part time job. She lives at home – not a problem. All I ask is that she help keep the kitchen clean so I can cook when I get home from work. It rarely happens without me asking and when I ask I get a half hearted job and a lot of passive aggressive sarcasm. Tonight we are drawing up a rental agreement and a chore list with dollar values so she can “work off” the rent or pay up. The free ride is over.