- December 17, 2023
- Posted by: legaleseblogger
- Category: Related News
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Title: Financial Arrangements for a Graduated Adult Child Living at Home
Introduction
Our just-graduated University 23 yr old has recently moved back home after securing their first “real” job. With a gross salary of about $58K, they will be responsible for various deductions, including a 12% student loan repayment and other regular deductions and taxes.
Financial Responsibilities
In addition to their regular expenses, we plan on making them responsible for expenses we have previously covered while they were a student, such as their car insurance and maintenance, as well as dental checkups. We believe it is essential for them to start shouldering these costs now that they are employed.
Household Contributions
While we are delighted to have them back home, we also want them to understand the importance of budgeting and financial responsibility. As they are “bonded” to their job for at least 2 years, we hope they can use this time to save as well as contribute to the household.
Fair Board Rate
We are considering asking for a fair rate of board for our adult child while recognizing that they are still family. However, we want to ensure that they do not become overly reliant on us. We are seeking a balanced approach where they can contribute to the household expenses without feeling like they are being taken advantage of.
AI Legalese Decoder and the Situation
The AI Legalese Decoder can help in this situation by providing guidance on the legal and financial implications of having a working adult child living at home. It can offer insights into fair board rates and how to navigate the delicate balance between supporting one’s child and expecting them to contribute to the household expenses. The AI Legalese Decoder can also provide information on relevant laws or regulations that may apply to this scenario, ensuring that all parties are aware of their rights and obligations.
Conclusion
In conclusion, having a graduated adult child move back home and start their first job comes with various financial considerations. By utilizing resources like AI Legalese Decoder, we can ensure that our arrangements are fair and legally sound, while also fostering a healthy and responsible approach to financial independence for our adult child.
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****** just grabbed a
If you dont need the money, charge them board but put it in a savings account for them.
They get use to a wage minus rent and get savings towards house deposit or travel.
Living back with your parents is mainly to save money, or your at rock bottom.
I read that OP wanted to START making cherub pay for things they HAD covered during uni… not backpay it.
For what it’s worth I think they should pay a small rent but chip in to cover expenses like food, power, internet. They can save while also preparing for life with parentals’ money.
Love the idea of something like 150 rent, 50 for expenses… and give them back the 150 when they leave. Depending on your own situation too.
I have two working adult sons living at home. We (husband and I) can manage our expenses thankfully so we don’t charge them rent. They work hard, are clean and tidy, contribute to household jobs and are fun to have around. They’re both saving loads and we think it’s a good move for them. The older one is paying his own expenses such as insurance etc. Think of this time at home as a chance for your child to maximize his earnings and save for his future.
IÔÇÖm also 23, make 60K. I pay $300 for board on a fortnightly basis which isnÔÇÖt a lot but I pay for my own groceries, bills and everything else. My other friends pay around $250-400 as well.
Maybe this is an unpopular opinion but why not use this as an opportunity for them to be able to save more money to put towards their future and help give them an advantage? If they suck at saving why not just have them put the money in an investment account or into their student loan?
If this were me I’d just simply go flatting if my own parents were gonna charge me rent.
So they probably take home about $780 a week.
Are you supplying food for all meals? If so, what does it roughly equate to? $100-150 a week?
Maybe charge another $100 a week on that.
If you don’t actually need the money from them, one idea is charge them whatever you think is fair. And put the money in a separate account and gift it to them if/when they are trying to buy a house. Even just the $100 a week is $5200 a year.
You’re not out of pocket as such, as their food is covered with the $100-150 or whatever you work it out to be.
Can set up an offset account for the $100 a week so you still benefit from it on your mortgage untill they buy a house or you decide to gift it to them (if you even do)
Don’t tell them you’re doing this tho, just be a nice surprise. Also means if the situation changes you’re not obligated to give them the money
$100 a week or $150 if including dinners, that’s how we do it, it’s fair
I didnÔÇÖt fully understand from your post if this is your intention, but please donÔÇÖt back-charge for things you paid for while they were a poor starving student. My parents hit me with a several thousand dollar car insurance bill after I graduated, back-charging me for years of premiums I thought we had agreed they were paying, and I still havenÔÇÖt forgotten it a decade later. It was unnecessary and petty.
$58k is not a high gross salary by any stretch of the imagination and with a 12% repayment and housing/rent prices having gone up immensely since you were their age, try to have some perspective. Salaries have not kept up with the cost of living, cost of education, etc. Is your kid responsible? Wanting to save for the future? I would reconsider charging any rent at all unless they prove they blow their money on frivolous things. Do you need the money? Are you struggling? Will it be a financial setback for you to have them home? If so, then absolutely ask them to contribute, but if not, then please try to use this time to enjoy your kid being home and help them save. Have them put all rent money theyÔÇÖd have paid you into a term deposit or investment account they can take out in the future to buy a home. And try to feel honored your kid wants to be home – you have clearly created an environment they want to come back to, and that is a wonderful thing – so try not to turn it into a transaction. IÔÇÖd be so honored if one day my kids wanted to come back home after university or if they were ever struggling, and I would hope they would feel welcome. You can ALWAYS reevaluate after a year.
If they pay board they will likely prefer to flat with other young adults. Staying at home with reduced living expenses enables an elevated level of savings. Sometimes this is the only way parents can help their kids get ahead, where they aren’t able to help out with a first home deposit.
They have just spent several years at uni. Where I assume they paid rent. They probably understand how rent works and how to handle it
A lot of people giving very high suggestions, probably have not considered that **charging more than $222 per week (IRD standard rate for boarders) means it is technically taxable**.
If they buy all thier own food, $100-150, if you buy some of thier food $150-200 (per week)
It is not that difficult to add up all your expenses and attribute proportionally for a more accurate number.
I wouldn’t want to profit off my kids. At most, i’d be charging expenses. But if they were demonstrating good saving or investment habbits, i’d be letting them make as many choices with their money as possible. This is when they can learn about the consequences of bad financial choices with almost no long-term penalties.
IÔÇÖve told my kids they can live here for free when theyÔÇÖre working as long as they are saving 50% of their take home income for a house. Give them the opportunity to get into a really great position early. The average house buying age in NZ is 35 and climbing. With this kind of help they could possibly do this 10 years earlier
My mother starting charging me rent from the moment I graduated high school. Have always resented her for it.
Our son moved back home, he pays for the cabin he lives in (perfectly good room available inside the house but he wants some space and privacy) and pays $100 a week for food, gas and power. He is only here 4 days a week and stays with his girlfriend the other days.
Prior to moving out he paid $150 and his phone bill and insurance was his own responsibility.
He is expected to help out as normal however.
If you need the money, change them only what you need to keep that support going.
If you don’t, charge them nothing, upon evidence they’re putting away the savings they say they’ll make. Don’t save for them and give back, they need to plan to stick to commitments and make plans for what to do with every resource they have when it’s time to leave the nest entirely and that includes how to manage their savings on their own.
Making it into sustainable adulthood is much more difficult than previous generations, everything especially costs of housing have gone up relative to incomes. The smartest thing a kiwi kid fresh into adulthood can do is go on an OE and chase the cash, and if your kid isn’t doing that they will need all the help they can get.
For a cynical laugh I plugged in their gross salary into a mortgage calculator. They can borrow up to $336k towards a home loan for a stable housing situation. As of June 2023 cheapest place in NZ on average was Southland at $476k and I’m betting house price and economic inflation will both rise faster than their pay. If you help them through these first critical years until their experience and pay rises catch up, they might not have to defer every adult life milestone.
How about charging them nothing so they can save the money in an index fund so you guys can build generational wealth?
I wouldnÔÇÖt change them for the expenses they made during uni, to me itÔÇÖs part of being a supportive parent.
My daughterÔÇÖs at uni now she lives rent free in my rental, itÔÇÖs my way of supporting her, she tells me all the time how grateful she is and she wouldnÔÇÖt be-able to afford uni if I didnÔÇÖt provide this for her.
I would change $100 plus expenses or $200 flat but I would wouldnÔÇÖt base it on their income, just to give myself more money.
Let them stay for free. You will be setting them up for life. Teach them about saving.
Honestly donÔÇÖt be a dick and donÔÇÖt make them pay. Young people have a lot of anxiety around their future, with things like buying a house and general expenses going up. They will just grow to resent you if you take money out of their weekly pay which is quite low in itself. If you really want them to pay you, just encourage them to put a certain amount in a high interest savings account or towards shares/house deposit. Your role as a parent at any age is to nurture them.
I plan to charge $300ish per week.
Then stick all that money in a savings account or similar and then gift it back when they need money for a home deposit.
Without telling them my plan.
My parents initially charged me very little rent and put it in a savings account that helped me into my first home. When I went home again after a couple of years, I paid actual rent to help with bills. You could always charge them something like $200 pw and spilt down the middle, half rent half savings. A higher amount also means not quite so much of a shock when they move to paying real rent in something like a shared place. You don’t even need to tell them what you’re doing. It could be a nice suprise for a house deposit or travel when the time comes.
What city?
$200 a week would be acceptable in a flat in napier, while $400 probably in wellington.
Based on Napier, I am thinking $200 a week if that includes dinner each day, $150 if it doesnt. That leaves them with about $500 a week for other expenses.
I have 2 adult kids at home. They pay $175NZD weekly for board.
This includes food, cooked meals, furnished bedroom, wifi, power and own bathroom. They are responsible for their own washing and cleaning their own spaces.
Essentially, they are treated like flatmates.
I’d do this:
1. All this is on the condition that they save half of what they earn after tax towards a deposit on a house (this includes whatever they put in KiwiSaver). The aim is to maximise this so maybe they’ll with their budgeting to see if they can save more. This is in place of paying board for their room.
2. They pay all their own bills, like insurance, phone etc. These will be incurred regardless of where they live and they need to start learning about these.
3. Take the joint utilities and groceries for your household and divide by the number of adults (just take an estimate, no need to calculate this even month). They play their equal portion on their pay cycle, whether monthly, fortnightly or whatever.
4. They do their fair amount of household chores. This again simulates what they would do it they are flatting. Especially if they are male. We’re a slobby lot, especially in our 20s
There’s a wide array of right answers here, depending on culture. Personally it’d depend on their character a bit, but at most I’d probably charge them a nominal rent of $100 a week or less, but keep it in a separate bank account and give it back to them when they leave.
If they do stick around and don’t pull their weight etc then it’s easier to increase their “rent” as needed.
In reality though if they’re working hard and the house is a decent size I’d probably let them stay for free. It’s probably a bit different if you’re in a 1 bathroom place where it’d be a bit annoying having extra adults around
Not matter what it is, put into a savings account and hand it your them when they finally move (if the goal is to teach them about living costs and not actually contribute to your financial situation)
Nothing, they are your child. Helping with expenses and food, sure, but not board.
I think $150 per week would be reasonable. That would cover their power, internet and water etc.
Just as a side note, as someone who moved back in with their parents after uni if theyÔÇÖre paying to live there please respect their independence and privacy. IÔÇÖd advise to sit down and set some mutual ground rules and/or boundaries for all of you. You all might have a great relationship, but itÔÇÖs always good to set some rules so if thereÔÇÖs trouble down the line you guys can talk it through.
It is sensible and helpful for the child to actually understand that life comes with costs. So charging board is a great way to help carry on teaching financial responsibility and reaility in the real world before they go out on their own. I think 150-200 is reasonable. I would, however be putting the money into an account for them to go towards their first home.
At bare minimum, charge them their proportion for food, power, internet, subscriptions etc. Decide if you want them to pay towards the house costs. In my house, IÔÇÖd charge somewhere between $150-$200 a week based on $150 per person for groceries. At very least, except them to pay for food and power – the other things may be your fixed costs. DonÔÇÖt be greedy, but donÔÇÖt give it back to them. YouÔÇÖre not a charity.
My parents charged me $150 a week and this was mid 2000s on a smaller income. Their rationale was that there was no benefit to my growth if they subsidized my lifestyle or sheltered me from the reality of life.
If I was in your position IÔÇÖd start by working out a budget with them based on what they would pay a week if they were flatting for a room, power, internet, food if youÔÇÖre providing it etc. and then charge them that much. If you can afford it you could save a portion of that board money to return to them as savings when they move out. Personally IÔÇÖd put that money into their kiwisaver because then at least itÔÇÖs a house deposit or long term savings and not cash for partying and expensive toys.
Charge them board and save it.
Give it back to them when they are 30.
They will love you.
If you can afford it then nothing. Encourage them to save and help out around the house. Expect them to cook dinner a few times a week and do a fair share of chores and house work.
You only charge them board if they are stalling in life and you want to encourage them to move out.
It’s a family home and the idea of charging family board is silly.
Sounds like a job for r/parenting
You should have a conversation with your child about what you want them to pay for – but to have them to contribute to costs you would incur anyway is a bit mean. I think you should explain you are not going to charge them but that they should be saving hard. Their salary is low when you deduct off the student loan payments etc. They and you should use this as a chance to give them a head start.
I charged enough to cover bills but lower than rent. So if going rate was 250 id charged 130-150 (inc power/internet etc ). This allows then to save
Feel free to also put aside some of that as savings for them (but dont tell them) for emergencies
We have 2 at home, they pay $100 per week, less if they find themselves working part time. This covers food, laundry, everythiing.
We don’t need the money and will likely gift some back when they move out, or even better when they need to buy a house or car.
Random thought for you that might have/have not been said… Charge them normal rent amount for your area but put some of it aside for savings for them when they move out they can buy stuff for that new place with the money saved on the side.
That way they get used to paying the normal amount but also have your help in saving money.
25% of after tax weekly income, or approx $190/week.
Stick it in a savings account and when they move out give it back as a housewarming gift.
Thank the lords u aren’t my parent 🙂
$0 you made a child. Provide for it.
ÔÇ£Adult childÔÇØ you must not like him much.
ItÔÇÖs really what he can afford. ThatÔÇÖs why youÔÇÖre doing it isnÔÇÖt it? Doing chores for you might be enough. Anything that will save you time and effort.
DonÔÇÖt use your kids as piggy banks. ItÔÇÖs gross.
Lol do you realise how expensive life is these days for young people
My starting point would be a third of their net income, enough for a meaningful contribution but still enough to leave them with money to enjoy lifestyle and save.