Life happens. One minute you're coasting towards graduation, ready to take on the world. The next, you've lost your job or haven't been able to find one in your field and you can't afford the rent any more. If you're lucky, your parents are both willing and able to let you move back in and regroup before you go back out into the world to live on your own.
Image: Failure to Launch/Paramount Pictures
You're grateful - you don't want to take advantage of your parents. When this happens, make the transition smoother by writing down on paper what the terms of your time at home will be, much like a lease. Put down how long you intend to be there, if you'll pay, and what your responsibilities will be while you're back home.
"Make things as formal as possible. Don't just rely on a handshake agreement," says Anthony D. Criscuolo, a Florida-based Certified Financial Planner. "Each party may have an expectation of how the deal will work, but those expectations may be very different if not discussed openly, so communication and writing out the terms is important."
Also crucial: Make sure you have a frank conversation with your parents before you move in about what their financial situation looks like and how much stress you'll be putting on them. You want to make this as easy and painless as possible for them.
"Don't be afraid to be the one to ask tough but caring questions about how helping you might fit into their monthly budget or long-term plans," says Criscuolo. "And don't be stingy with the details of your own situation, which may make your parents or other family member assume the worst needlessly."
If need be, have a neutral third party present when you agree to the terms. Being as honest as you can will make the transition smoother, and will hopefully help prevent resentment down the road. So be up front about your situation, both career- and finance-wise.
"It's harder for a parent to accept you back into their home if they have no idea what your situation is other than the fact that you say you have a need," says Jeff White, financial analyst at FitSmallBusiness.com. "Then there could be frustrations every time they see you spending money on things that are 'extras' instead of needs. They may think you're just taking advantage of their kindness."
Provide Your Parents With Your Move-Out Plan
Here are some other tips from Jeff Proctor, owner of DollarSprout:
- Make it clear that this is a temporary solution.
- Provide a clear plan for getting back on your feet. For example, explain to your parents how you will improve your earning situation, how you will change your budget, how long you plan to stay, and so on.
- Set a firm goal date for either a) moving back out or b) re-evaluating how to get it together.
Laura Boedges, a wealth adviser at HighTower St Louis, is largely in agreement, adding that it's important to take time to regroup, but also work to get your finances in order while you have something like a safety net.
Make the most of your time at home by prioritising debt repayment and so on. If your parents don't want rent, take the initiative to save that money in a separate account.
"Make an agreement with your parents about what you will do to contribute to the household while you are there," says Boedges. "Offer to pay rent or to cover the cost of monthly utilities."
Most importantly, "be respectful of your folks," says Boedges. "Keep your agreements. They have given you a respite."