Making a multi-generational household a positive arrangement

Kids Moving Home

by Rick Kahler

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It's interesting that in today's world, we tend to assume that if adult children move in with parents, it's the children who need help and support. In earlier times, combining households was more often a way for children to help their parents.

There's no reason a multi-generational household can't become a positive arrangement for everyone. The key is to manage it carefully and consciously. Here are a few potential benefits of a multi-generational household:

  1. Everybody saves money. Combining households can save money for both generations. If parents have more space than they need and adult children need more space than they can afford, pooling resources in one house can make the difference between comfort and just barely scraping by.

  2. Help with the heavy lifting. As life expectancy increases and "old age" becomes a lot older than it used to be, parents in their 60s or 70s don't necessarily need physical care and support. Yet having younger adults in the household to help with yard work, housework, and maintenance can be a great help. Also, as parents age, living with adult children can allow them to stay in the family home longer.

  3. It provides flexibility. Grandparents who want to do a lot of traveling in retirement can come and go more freely when someone else is living in the house. A shared household can also free up more financial resources for traveling.

  4. Living together can foster close bonds between grandparents and grandchildren. For some families, it can work well for grandparents to provide daycare while parents work. It's important, however, to make this a clear choice. Just because you're a loving grandma doesn't automatically mean you want to take care of the little darlings all day every day. It's also crucial for all the adults to work together and for the grandparents to support the parents' child-raising decisions.

  5. It fosters closer family relationships. Especially if parents and children have strong, healthy relationships to begin with, sharing a household can provide rich opportunities to enjoy family activities and time together. It's helpful if both parties can view it as a mutually satisfying agreement between adults rather than having one generation dependent upon the other.

  6. Before deciding to share a household, it's essential to agree (in writing) on both short-term and long-term financial arrangements.

    • One crucial question is who pays what. Bills might be divided up, or both generations might contribute equally or proportionately to a separate account for household bills.

    • Another issue to clarify is who owns the house. Parents might retain ownership, kids might inherit the house or buy it over time, or ownership might be through joint tenancy or by a separate LLC. It's important to make this decision in the larger context of the parents' estate planning in order to be fair to other children.

    • It's a good idea to agree to revisit financial agreements periodically in case they need to be altered over time.

In today's economic climate, sharing a home has obvious financial benefits. It has the potential for emotional benefits, as well. While the U.S. has moved away from a tradition of a multi-generational household, in some other cultures, families still tend to share living quarters. It's an arrangement that can work well when families make a conscious choice to see it as an opportunity for mutual support and satisfaction.

Rick Kahler

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at Contact him at or 343-1400, ext. 111.

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