Life after college is an exciting time for both you and your adult child. But it's also time to make some major life decisions.
One option you should prepare for? Moving back home with the parents.
Living with parents has become increasingly common. More than 32 percent of young adults live with their parents, according to Pew Research. And last year, 37 percent of graduating college seniors planned to live at home at least one year or more after graduation, according to a survey by the job site Indeed.
It's not surprising: Millennials are delaying marriage into their mid-to-late 20's and they tend to get along better with mom and dad than earlier generations did.
"It used to be you were expected to be on your own and you didn't really want to hang out with your parents," says Angie O'Leary, head of wealth planning at RBC Wealth Management in Minneapolis. "Today, the relationships are very different."
There are financial reasons, too: Major urban markets sport high rents and many college grads have student loan debt. In this environment, “parents are their graduates' lifeline," says Susan Newman, Ph.D., social psychologist and author of "Under One Roof Again: All Grown Up and (Re)learning to Live Together Happily".
While allowing grown “kids" to move back home helps them save money or pay off student debt, some critics say the practice can keep young adults from taking responsibility for their lives. Another criticism of the practice is that it perpetuates the dependence of a generation raised by hovering "helicopter parents."
Despite the criticism, your young adult may need or want to move back home and you may agree. But it's important not to slip back into the old routines, like doing everything for your child or micromanaging their schedules, which can lead to resentment on both sides.
These steps may help make youngsters returning to the nest a positive experience that enriches the parent-child relationship.
Focus on the positives
When your adult child moves back into your home, it may feel like a bit of a disappointment for both parents and child. However, it can be “a wonderful opportunity to enrich your bond and get to know each other as people, rather than as parent and child," Newman says.
Parents can use the time with a boomerang kid to teach financial literacy and help them get into the habit of saving and investing, says O'Leary.
"Some families encourage their young adult to put the money they would otherwise have spent on rent, insurance and phone bills into an emergency savings fund - or into their 401(k) at work - so they get into the habit of getting their employer match and have a solid start financially," she says.
When her own daughter moved home to Minneapolis after graduating from the University of Denver, O'Leary had her save up the down payment for a house, which she recently purchased. "It was a great eye-opener for her to see how much money goes into things like property taxes and utilities," she says.
Try to focus on developing interdependence—in which both parties gain something from each other—rather than simply enabling dependence, says Jane Adams, the author of "I'm Still Your Mother" and a speaker who provides coaching for parents of grown children.
“Having your kid back home can provide companionship, help with household chores or expenses, and can give you a viewpoint into a world you would otherwise miss out on," Adams says. “You also get to have your parenting validated; you must have been a good parent if your kids still want to be around you."
If you're able to provide support for your young adult by putting a roof over her head, she may be more likely to support you when you are older and possibly need a place to live, Newman noted.
“In short, care for your young adults now and they will care for you later," she says.
Set house rules
Keep in mind that the college graduate who's returning to you is not the same teenage kid who left a few years ago. To live together harmoniously and with mutual respect, experts recommend proactively discussing expectations.
Here are four things that you and your adult child may want to discuss:
1. Exit plan
Early on, set a hoped-for date when your child will be able to live independently. The date doesn't have to be set in stone, but at least everyone will be on the same page about the basic timeframe and the temporary nature of this living arrangement. After six months, Neman recommends revisiting the plan and adjusting it as needed.
“It is not meant to be a hard-and-fast moving out date, but rather an incentive to keep your offspring motivated and moving in a positive direction," she says.
To avoid feelings of resentment, and to encourage independence, your adult child should have some responsibilities in the household beyond taking care of his or her own space and laundry. Take time to discuss together what those responsibilities will be, such as doing yard work, cleaning or grocery shopping.
“When your child does something for you, acknowledge it - say thank you," Adams says. “While that acknowledgement should go both ways, don't keep reminding them of everything you do for them."
3. Financial contributions
Think about how or whether your adult child could contribute financially to the household by paying rent or helping with other bills. In many cases, the reason they are living with you may be to save money, but making some contribution may encourage responsibility and avoid resentment. Just don't make finances the crux of your relationship.
“Monetary contributions should be discussed, then dropped," Newman says. “If he or she is employed, find a realistic, even token contribution - for instance, keep gas in the car, pay the utility bill or his own cellphone bill, or a small monthly rent. If you can afford to do so, put that money away and return it to your child as a gift when he or she leaves to live on her own."
4. Communicate openly
Resolve to communicate openly, like adults. Decide that if something upsets you or your adult child, you will discuss it honestly and respectfully.
“If your kid says he's living at home to save money and you see them spending all of it on cars, clothes and concert tickets, it's okay to ask about it and sit down and set a goal together and make a plan for how to achieve it," Adams says.
You will be better able to foster positive communication with your young adult if you avoid hot button issues that may have created unhappiness years ago, such as your child's weight or friends.
The choice is yours
Like most parents, you probably want to help your child in any way you can. But in some cases, adult children can take advantage of their parents or the situation, and no parent has to sacrifice their own finances, safety or values to accommodate a grown child.
“You have to set boundaries for how you'd like for things to go," Adams says. “And if the situation is just intolerable, the parents get to say, 'We'd like for you to make other plans.'"
By being proactive, you can avoid making the move back home stressful for yourself and your young adult. “Appreciate the time you have together and focus on positives as a new way to turn your parent-adult child relationship into a friendship," Newman says.
Non-deposit investment products offered through RBC Wealth Management are not FDIC insured, are not a deposit or other obligation of, or guaranteed by, a bank, and are subject to investment risks, including possible loss of the principal amount invested.
City National Bank (CNB) is an affiliate of RBC Wealth Management and an indirect wholly owned subsidiary of Royal Bank of Canada. This article is provided for informational purposes only and is not intended to constitute an offer or solicitation to sell the products or services of the providers identified. City National Bank makes no recommendation of the products or services offered by the providers mentioned in this article. The opinions expressed are those of the persons quoted and not necessarily the opinions of City National Bank.