Finding financial harmony in multigenerational living

Tips for when your parents or kids move in with you

You’ve decided to make the selfless decision to support your family in whatever phase of life they are in. This reunion can provide a unique set of challenges, along with opportunities to learn how to balance independence with support. Whether your focus is on supporting your kids after college or ensuring a smooth retirement move for your parents, our tips can help you successfully manage this transition.

Establish clear boundaries

Clearly define financial boundaries with your family members, including who will cover expenses such as rent/mortgage, utilities, groceries, and personal costs. This proactive approach prevents misunderstandings and creates a shared understanding of everyone’s financial contributions.

Practice open communication

For both parents and kids, it’s important to have open and honest conversations to understand their financial goals, challenges, and expectations. This sets the stage for collaborative planning and financial transparency. Start with conversations about their savings, earning potential, pension plans, and medical expenses. Once you gain a thorough understanding of their financial situation, you can plan and budget effectively for their needs.

Collaborative budgeting with young adults

Work together to create a comprehensive budget that not only allocates expenses, but also educates your children on the intricacies of managing finances. Include categories like rent, utilities, groceries, transportation, and personal expenses to provide a holistic view.

Encourage financial responsibility

Take advantage of this time to instill financial responsibility and independence in your recent graduate. Guide them in creating a budget, managing student loan debt, and developing a savings plan for future goals so they are well-prepared when it’s time to move out.

Explore additional income opportunities with your children

Encourage your children to explore part-time jobs, freelancing, or a side hustle to supplement their income. This contributes to their financial stability and provides valuable experience and skills for their future careers. Research ideas together and provide the resources they may need to get started on their next step.

Support your parent’s retirement transition

Proactively support your parents in their retirement transition by exploring government benefits, discussing legacy planning, and giving them space to explore their newfound freedom. This is your time to show your appreciation for all that your parents have given you. You can even help them financially by supporting a new hobby or aspiration.

Plan for long-term care needs

Even if there is no need for this right now, you should consider engaging in discussions and plans for potential long-term care needs. Understanding the associated costs can help you prepare financially for future scenarios and ensures their well-being.

We are here to help

Achieving financial balance in multigenerational living can be challenging, but it is also worth it. Whether your focus is on recent graduates or retired parents, these tips will help you navigate the financial aspects of this significant family transition with confidence. If you need help navigating this new financial situation, Scarborough is here to help. Together we can review your unique situation and create a plan that is harmonious for everyone involved.