Should You Be Charging Your Adult Children Rent?
If your adult children are still living at home, a discussion about them paying rent might come up every now and again. However, how much should you charge them, if at all? On top of this, you might need to ask yourself other questions. Are there strings attached to these contributions? What are your expectations, as well as your children’s? There are a lot of difficult financial decisions to make when it comes to you and your children, and many of them are going to hit close to home. So, it’s understandable if you don’t want to start charging your adult children rent, but it’s also important to look into the reasons why it might be a good idea.
A Good Opportunity to Educate Them About Money
Hopefully, at some time in your life, you’ve learned about the value of the American dollar, the responsibility of earning an income, and how to manage your money in general. It might have been your own parents who taught you, or maybe you’ve had to learn it for yourself. In fact, you might still be learning it.
Whatever your level of financial education might be, you’ll probably want your children to reach the same level, and have every opportunity you did. For this reason, charging them a bit of rent can be a way to help them learn those valuable lessons.
Click here for our top tips on how to teach your children about personal finance.
Teaching Them That Life Does NOT Come Cheap
If your child is in their mid-twenties, is working full-time, and living at home without paying rent, they may be tempted to spend their money irresponsibly. If they’re throwing their money away on whatever unnecessary thing they feel like, they might not be able to maintain a solid budget once they’ve finally left, or are kicked out of your house. Charging them a small amount for rent will help see that they’re learning to manage their income properly. It might not seem like a big adjustment for them to go from paying no bills to one regular bill, but soon your child should be able to start making smarter financial choices.
Giving your child at least a basic knowledge of financial responsibility is one of the best things you can do for them. It’s extremely important to teach them that building a life is not easy, free or for that matter, cheap. If you’ve already been charging them rent, once they’ve actually moved out, paying someone else to rent a space will come as less of a jolt to their system, and they won’t need to come running back to you with every problem they have.
Think About Other Types of Rent
If, after reading this, you’re still not on board with the notion of charging your adult child a set amount of money to continue living at home, you can also think about other types of rent. Nothing wrong with a little bit of manual labor. If they aren’t forking over some rent money, your child should at the very least be lending a helping hand with the upkeep of your house. Throwing a few chores their way, whether it’s getting the groceries, doing the laundry or dishes, driving a younger sibling about, or all of the above, won’t be bad for them. While you might not be giving them all the knowledge they should have about financial stability, you’ll at least be teaching them about just how much work goes into maintaining a functioning household.
If they’re going to remain under your roof for the foreseeable future, one thing you could talk to your adult children about is making regular contributions to their savings accounts, or setting other financial goals for themselves, such as saving up for a down payment on a house or paying off their student debt. Even if it just means them setting up a rainy-day fund, at least you’ll be giving them some financial responsibility.
Our Top Money Management Tips for Families, read here.
Bringing Up The Subject of Paying Rent
Are you having anxiety about bringing up the subject of rent? Here are a few tips on how to get them used to the idea of paying rent.
- Remember, you are the parents in this relationship. The house belongs to you, and you’ve committed a lot of time and hard work to pay for it.
- Realize that your child is an adult and should, therefore, have a better understanding of the responsibility and costs of a functioning household.
- Sit down, and have a conversation about how much it’s costing you to have them living at home (i.e. the cost of groceries, heating, and water, etc.)
- Let them know that you are willing to negotiate a fair price for their rent.
- Assure them that you’re not trying to steal from them, you simply want some help covering the cost of the household items and the amenities that they tend to use on a regular basis.
- When this is settled, reach an agreement for the price, and then a date that they should pay their contributions by.
- Just in case, you might want to have a small discussion about what will happen, or what can be done if your child is unable to pay the rent.
Remember, you need to take your own financial standing into account, just as much as theirs. Keep this in mind if you’re having trouble bringing up the idea of rent to your adult children. If you decide to start charging them rent, you’ll not only be helping your children learn proper money management skills, but you’ll also be reducing the amount of financial stress on yourself and the budget you’re trying to maintain.