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Financial Planning for Multigenerational Households

Family PortraitDoes financial planning for your family include just your nuclear family or do you live in a household with multiple generations?

In an article on managing life in a multigenerational household on DailyFinance.com, Sheryl Nance-Nash notes that, “As of the end of 2009, 51.4 million Americans lived in a home with three or more generations under one roof…” That number had increased by almost 5 million from 2007. Whether it is aging parents moving in with their adult children or college graduates returning home to Mom and Dad, the article cites a Generations United survey with found that “…66% of people in multigenerational households cited the economy as a factor, while 21% said it was the only factor.”

Clarify intentionsDailyFinance.com emphasizes the importance of knowing why you are moving or having relatives move in. Is it because someone needs financial assistance? Is it because there is a need for live-in childcare? “The clearer you are up front about motivations, the easier it is to anticipate–and head off–potential conflicts.”

Talk it out: Discuss budget and outline responsibilities before you consolidate households and continue to discuss these things in a way that works for you. Some families benefit from formal family budget meetings while other families are more comfortable with informal discussions.

Everyone contributes: When a relative moves in, it is important that he or she contributes to the household in some way—through finances or household chores.

Some families purchase a new house or renovate an existing home to accommodate new family members; in some cases, multigenerational households work with existing space. No matter your choice, you’ll want to consider the effect on your financial outlook. Combining households is a major life change and a Fee-Only financial planner can help you manage your money during this transition.