9 mistakes parents make with 20-something kids living at home
Mistake: Reject the idea of them moving home outright
"It's actually a really smart decision for their adult children to come home to live with their parents," says Eweka.
"A lot of young adults are dealing with student debt, and they're really struggling to pay off their student debt, and be able to save for retirement, and be able to save for some of their other financial goals," she says. Staying at home, even if not for long, she continues, could help them get a leg up on paying off that debt, buying a home, or just learning about money.
Mistake: Not considering the cost of another person at home
As you're likely approaching retirement age yourself by the time your children are asking to move back in, it's something you'll want to really make sure you can afford.
"I often tell parents that don't want to jeopardize your own retirement savings to spend money on supporting your adult children," says Eweka.
For many of today's parents who are retired or are approaching retirement, having children move back home is a reality, and an expensive one at that.
"Review your cash flow and budget with your financial planner to make sure that you can afford it," says Eweka.
Mistake: Let them take a backseat at home
Just like when they were young, it's important that your now-adult children have some responsibilities of their own around the house if they're living there.
An important conversation to have before your child moves back in, according to Eweka, is what the child is going to do to help financially, or otherwise, at home.
It could be something as simple as mowing the lawn or doing the dishes, or even taking on some of the financial responsibilities. "Charge them rent. Or, let them pay a utility bill or two," says Eweka.
If they're not able to take on financial responsibilities yet, have them do things that will save you money. "Can they do some of the cooking so that you eat out less?" asks Eweka. "What are the things that they can physically do to help with expenses in the home?"
Mistake: Assuming they'll move out when they're ready
Even though living at home might be a good choice, it doesn't mean that it's time for your children to simply spin their wheels. Eweka suggests discussing their goals, next steps, or plans, and how long they plan to stay from the start.
Does your child want to save for the down payment on a house? Do they need to build credit or have a job in order to get a place of their own? Make sure that your child has a plan to start jumping those adulthood hurdles, and has a plan in place to ultimately move on.
As a parent, you'll want to consider your own role in the equation. Even if you're truly able to financially support them, consider if you should be doing so. "You want to empower your children and not enable them," says Eweka.
Mistake: Thinking they automatically know how to manage cash
Once they've got a goal, have them determine how much they'll need to have saved to meet that goal. Whether it's the deposit and first and last month's rent for an apartment or the down payment on a house, help them to calculate how much they'll realistically need to save.
Once they have a number in mind, start helping them to save. Eweka suggests that parents who can afford not to charge their kids rent request a payment anyway that goes instead into savings, to help them save for a home or their first emergency fund.
"Save that money that you're getting from your child," suggests Eweka. "Then, when they finally move out, give them a big check for a down payment or their new home."
Mistake: Letting them ignore money
For many new college graduates and young adults, credit is a mystery.
Do what you can to help them start understanding and building credit, and teaching them about how important it is. If they start while they're still living with you, they'll already have some credit built to help when it comes time to move on.
While there are several ways to build credit, an easy method includes opening a no-annual-fee credit card and paying it off in full every month.
Eweka also says that having your children take on some financial responsibility, like paying a bill or two, can help build credit, too. "Sometimes, those use those utility bills may help their credit score," says Eweka.
Mistake: Letting them wait for the perfect job
To Eweka, there's a difference between helping your children get ahead and enabling them to stay behind. And part of that means working, even if it's not the glamorous job they pictured on graduation day.
"Children might want to come home and wait for the job at the best law firm versus going and working a public defender role," says Eweka for example. But she says that forcing them to take that less-than-perfect job is also an important part of helping rather than enabling your children.
Eweka says that this is part of holding them responsible. "Help your kid get a job that might give them healthcare coverage, and cover some of those debts while they're at home so that they're in employment, and they're getting job exposure and experience."
Mistake: Leaving them to their own devices
Eweka suggests using this time at home as an opportunity to teach your child about financial topics like saving for retirement, how to pay off debt, how to use credit responsibly, and other situations they'll come across as they venture into adulthood.
Teaching them about retirement savings could be a valuable lesson, as many Americans aren't starting to save until it's too late. Eweka says this is particularly important to encourage them to do while they're still young.
She suggests teaching them now that they can't wait to save, and uses the following example to illustrate why. "If you're 23 and move back home, now you have the cash flow to put $1,000 a month into your retirement plan. Over a 40-year period, you'll have $1.8 million if you assume about a 6% rate of return," she says. She continues: "Even if you put $2,000 per month away to make up for what you didn't save for the first 20 years, you're only going to have $882,000."
In this example, compound interest is key — teaching your adult child financial lessons like this can have a huge effect on how they save and spend when starting their adult life.
Mistake: Treating your kids like ... kids
"Your children are adults now, so now it's time to really start treating them like adults," says Eweka. Part of this, she says, is having conversations about money and responsibilities.
This time at home could be a learning experience if done right — and teaching your child the tools they need to take on the world on their own is key to helping them get a start on their adult life. While it's more than OK to live at home, Eweka says parents should be conscientious about how they're holding their children responsible for their own futures.
"In the back of your mind, ask yourself this question: Am I helping or am I enabling my adult children?" says Eweka. "Then, you can make the right decisions for your child."
Next Story
I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
From terrace to table: 8 Edible plants you can grow in your home
India fourth largest military spender globally in 2023: SIPRI report
New study forecasts high chance of record-breaking heat and humidity in India in the coming months
Gold plunges ₹1,450 to ₹72,200, silver prices dive by ₹2,300
Strong domestic demand supporting India's growth: Morgan Stanley
