It's not uncommon any more to see multi-generational family homes. With the economy continuing to lag, many people have adult children returning home after college or aging parents moving in with their children.
This can be a complicated situation for everyone, and not without a little bit of stress. Suzanne Klenk from Washington State Employees Credit Union joins New Day with a few tips about how to survive - financially and emotionally - when the home fills back up.
Tip #1: Discuss the Financial Plan in Advance
These discussions may be difficult, but they will save you many headaches down the road. What is the goal? Is this a temporary or long term arrangement? If and elderly parent is involved, do other siblings need to be included in the discussion? Contact WSECU or your credit union and discuss accounts that allow maximum safety along with appropriate independence. Your Member Consultant can assist with services that will make these financial transitions easier.
What other things should you discuss?
Timeline is an important discussion. How long will they be living in your home? And what will be the contribution to the household expenses? Make sure you realistically estimate the increase in household expenses and decide and appropriate contribution from your family member. It's a new experience for parents to think about "charging" their children for their share of the rescources, but it might be necessary and it's certainly probably appropriate. Setting the ground rules will enable everyone to feel as though they are doing their share to support an arrangement that serves everyone…and still live at a significantly lower cost.
Tip # 2. You say to sign an agreement
This can be uncomfortable, but explain that is just keeps all the agreed details clear….for both parties. This is not to say that the details are not negotiable or that you can't change them down the line, but it captures what the initial agreement was.
Make sure it includes the following:
· Monthly savings plan
· Family Member’s monthly contribution to the household (Monetary/Tangible – what chores will they take on, what are other household rules you all need to agree to)
· A Timeline in which financial goal will be attained and they can move if that is the goal. (Agree to revisit the agreement if the situation warrants a re-negotiation)
Tip # 3: Get a Post Office Box. For you or the Family Member?
Well, for the family member…but if you don’t have a locking mail box, you should get one for yourself as well. Mail theft is a huge problem and a leading way that Identity thieves get the information they need to commit fraud. But for this conversation is important to keep all mail separate. This will greatly reduce lost items and prevent possible compromise of financial and personal information.
Tip # 4: Keep your personal financial information private.
This is always a good idea. A new resident comes with new visitors. Invest in a personal safe, and encourage the family member to do the same. Find a secure spot it your home for checks, credit cards, etc. If you bank online, create a secure profile that is separate from other users. Keeping your information private keeps honest people honest.
Tip # 5: Be clear with yourself and your family member about your role.
This is tricky, but very important. Be careful not to revert to a parent/child financial relationship. (ie: “Oh, they are trying to save money, so I’ll buy this”……or you are asked to purchase something for the adult child or parent and they forget to reimburse you.) This type of situation quickly erodes the relationship and can be trouble.
Keep good records! If other family members are involved it is a good idea to have periodic check in meetings to keep things transparent. And a cautionary note... it's sad but fraud, identity theft, and elder financial abuse are crimes often committed by a member of the victim’s family. By protecting your financial information you are not only preventing yourself from becoming a victim and assisting honest people to remain honest, but you will be modeling good financial habits to that family member that needed to move in with you to save money!
As always, WSECU is here to answer your questions regarding your finances during these difficult times. As your life situation changes, so do your financial needs. Contact Suzanne with a financial question, or have her come conduct a workshop about a variety of topics at your business or organization. Here's her email address: email@example.com