Multigenerational Household Money Management

Sep 13, 2017 ​

Multigenerational Family Reviewing Finances

Having several generations of a family ­living under one roof — such as parents or adult children — can happen for many reasons. Whether the move makes financial sense, it's due to an illness, or because it's part of the family's history or culture, a “full-nest” arrangement requires open lines of communication between everyone to ensure a happy home. Here's some tips make it work well for all involved.

When Parents Move In

Older parents have probably spent years thinking about the freedom of their golden years, so having to live under common rules — even with loved ones — can take some adjustment. Using the techniques below can create a more comfortable dynamic for family money decisions.

Create a new budget — Any time more people are living in a household, additional expenses are bound to arise. Identifying changes by creating a new budget will help make it clear what these expenses are and how to deal with them. It's also a good approach to start a discussion of what your parent or parents feel they will be able to contribute — if they are even in a position to do so. Lastly, talking about money with your parents in this type of setting can help you get a better understanding of what their finances look like overall. If your parents seem to be stressed or confused about their money, this can be a great opportunity to offer help.

Draw up an agreement — This might seem overly formal, but having an agreement about financial expectations can help avoid conflicts down the road. While it doesn't necessarily need to be posted for all to see, it's a good idea to keep it somewhere it can be accessed if questions come up.

Create time for review and input — On your family calendar, mark a day at least once a month when you can talk about finances. It can help to schedule this meeting alongside an activity the whole family enjoys doing together, like going for a nature walk or watching a movie. You can also use this time to review any budget items that may need adjusting.

Have fun money conversations too — If financial conversations always revolve around cutting expenses or contributing more to necessities, they'll be looked upon with dread. Discussing how money can be spent on fun family activities will lighten the burden, and also help to create some healthy anticipation for a good time.

When Adult Children Move In

Along with all the steps above, living with an adult child or other adult family member requires a little extra effort, since your houseguest may still be trying to map out his or her financial future.

Take advantage of time together — It may be difficult to create structure in this new living situation. By creating a joint time to work on your respective money management plans, you can not only make sure the changes in household expenses are addressed, but create an opportunity for your adult child to create a plan right alongside you. Creating an environment in which finances are talked about in an open and constructive way can make it easier to start talking about creating a stronger financial future.

Consider setting cash flow guidelines — Think about setting guidelines for money exchanges. Establishing standards for contributions expected in either direction can help to reduce friction.

Have a “big picture” plan in place — Along with an agreement to address expectations, it is important to have a plan for the future. How long does your child plan to live with you? If the child is unemployed and looking for a job, what are the expectations for the job search? If the idea is to work and save money to become independent, what is the savings goal? Having answers and solutions in place for questions like these make clear where everybody stands, so there are fewer misunderstandings in the future.

Focus on using the time wisely — An adult child moving back home might be going through a tough time - a divorce, trying to find work, or recovering from a personal crisis. While it may be a time of frustration, it can also be an opportunity. For example, if an adult child has too much debt like credit cards or loans, it can be easier to pay down while housing expenses are relatively low. Giving them encouragement and sharing goal-setting resources will help build a promising financial future.

If you run into trouble, seek help — While living with relatives can be hard, there is an opportunity for greater connection and personal fulfillment. Having a neutral third party with financial knowledge, such as a Nusenda Credit Union financial consultant, can help analyze the situation at hand, and make recommendations for creating a financial plan that will help meet everyone's needs.

Help is always available — and always free! Resources are available to Nusenda members or the public at-large:

For Nusenda members, Money Manager is an online financial management tool that helps you get a clear picture of your financial situation. From tracking spending, to setting saving goals, to paying your debt down faster — all in one place — you're better equipped to plan for a health financial future.

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