Does 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 intentions: DailyFinance.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.