With the economy as it is, it is more and more common for young people to stay at home with the parents longer or to return home after being out on their own for a while. In addition to the negotiations that need to take place over privacy, responsibility, chores, etc. discussing finances can be a huge challenge. Here are some tips for talking about finances and discussing money and work with adult children who are living at home:
Your personal values will dictate whether you want to charge grown children rent, or ask them to contribute to the groceries, utilities or other household expenses while they are living at home. Some parents feel it is important for kids living at home to contribute while others see their role as supporter and do not make any requests. Once you decide how you feel and what your belief system is, it is important to also consider what is best for the grown children. Is it better for them to contribute? Could they be asked to pay for any additional expenses above and beyond the normal household expenses? Whatever you decide, the first step is to become clear in your thinking before sitting down with your child.
Prepare an adjusted budget that you can share as part of the discussion. Many parents would rather just pay for things than to discuss finances with their children (even if they are adults.) If you are going to have the discussion, however, be prepared and have the figures written out so you can stay focused on the finances and not speak in vagaries.
Try to keep the emotions and past out of the discussion. Just because a grown child was financially irresponsible as a youth does not mean that they will be that way forever. In fact, this might be a “second chance” for you to help an adult child develop financial management and responsibility. Stay in the present and try to talk about finances as two adults-not as parent and child. Stay focused on keeping your relationship separate from discussions about money.
Set goals and limits on the financial changes. If the ultimate goal is for the adult child to move back out on his or her own, design your financial arrangement to facilitate that and discuss the steps it is going to take. If the young person needs to save for a housing deposit or pay off debts-make this a priority and develop a plan together for how it can be accomplished. Again, keep emotions out of it and focus on the financial realities. Decide how flexible you can be and set deadlines for when payments will be made and stick to them. If you can be clear and concise from the beginning, it may make the living together run smoothly.
Let’s start with a confession: I have never been cool. I don’t ever think back on my glory days in the club scene. Photos of me from nearly any period of my life reveal me to be hopelessly out-of-touch with all things fashionable. It’s not because I’m not in my twenties anymore. It’s not because I’m a mom. It’s because I’m me.
But every once in a very long while something spectacular happens: fashion comes to me. I stumble upon a style that is, apparently, very “with it.” Such is the case with my radical frugality. I came to it out of necessity, years before this economic downturn. I got looks of pity from friends and family for several years, but now I get more people asking me for advice as they too are forced to find more ways to cut back.
If you’ve experienced a “budget reduction” and are looking for ways to cut back, here are my best ideas. I’ve lived or am currently living every one of them.
- Take stock of what’s important to you. Do not skip this step! Take the time to set goals for yourself and imagine what you would like your life to look like. Most of us say that money can’t buy happiness, but we don’t live that way. Looking to fill a void is the fastest way to flush money down the drain. Think of Michael Jackson or Britney Spears – no amount of money can make you a happy person. Find fulfillment in your life outside of status and vacations.
- Sell big things. Cars, furniture, boats, ATV’s, whatever you have. Most people can picture doing this when “things get really bad,” but the problem is that their alarm goes off too late. Instead of getting worried when they dip into their emergency fund (or being worried that they don’t have an emergency fund!), they start to worry when their lines of credit dry up. At that point there’s not nearly as much you can do. So get desperate sooner. Do you really need two cars?
- Kill your TV. My husband and I stopped all television service to our apartment three years ago and we really haven’t missed it. It’s a huge, ongoing expense, but the worst part is the advertising. We are blissfully ignorant of the latest tech gadgets, the best-looking kitchens in America, and the places people are taking exotic vacations. Lead yourself not into temptation.
- Eat in and cook from scratch. It’s insane how much money a person can spend on eating out and/or buying expensive prepared foods. I was not a big cook, but I discovered that making my own food is not as hard and doesn’t take as long as I thought. Meal planning is a crucial component to making this one work. Another great idea in this category would be to make your own cleaning supplies. A simple internet search will yield countless recipes for all kinds of great, nontoxic cleaners and detergents.
- Keep track. Of everything. Write down your financial goals. Make a written budget every month and stick to it, make a poster, whatever it takes.
- Use cash. Cash helps us all stay out of denial. When we use plastic, in the form of credit or debit cards, we lose touch with the most basic rule of money: money is finite. We only have so much of it. Cash is also the easiest way to stick with your budget — put it in envelopes according to category and when it’s gone, it’s gone. Very simple.
Above all, I’ve learned that saving money is a mindset. There are a thousand methods but all of them start with a genuine desire to change your situation. If you’re still looking for ways to save a lot of money without making a dent in your lifestyle, you won’t get far. But if you stop looking to your finances to find fulfillment, you’re on the right track.