Living in a multi-generational home can be challenging at times as a family. You are sharing the house with either your elderly parents, or adult children, or both. In any situation, the rules need to be set clear before any dispute occurs.
Apart from the various rules and regulations, finances are often ignored because of the uncomfortable nature. However, you must share the expenses if the new residents have money in their account.
Here are some tips you might need to create a plan for finances in a multi-generational home.
Discuss the Responsibilities
The first and most important topic to discuss is the current financial situation of the new and current residents. Whether they are your parents or children, you must ensure they can pay certain expenses. You can then divide the responsibilities based on their financial situation.
You cannot overwhelm them with bills they cannot afford to pay. Do not think of them as a guest. It is good to share responsibility for the benefit of your finances.
Create a New Budget
Based on the shared responsibilities, you need to create a new budget for the house. The focus should be on using the additional income more efficiently. You should give them a fair share of their income for personal expenses.
Your family members may have some financial issues to address. Support them in their time of need by contributing more to the budget. The situation is temporary; therefore, it won’t put much stress on your finances.
Spend Time Together
The new living arrangement is a great opportunity to spend some quality time together as a family. You can plan some weekend activities to bond with your children and parents. The situation is somehow different as they are at a different stage of their life now.
Distribute the cost of activity evenly among the earning member of the family. Try to relax the cost for those who are facing financial troubles. Some low-cost family activities include a visit to the park, barbeque lunch in the backyard, or indoor sports.
The conversation might be awkward to start, but it is critical to avoid any dispute. You must set boundaries very clear during their stay. The number of guests, the time to come home, or the period of stay.
Not only the basic rules, but they must also be aware of the food choices and refrigerator layout. Vegan parents and their non-vegetarian children are not an ideal setup for freedom in the kitchen department.
Determine Financial Goals
Your child may ask for a temporary stay to sail through the financial troubles. However, they might end up setting needless goals like vacations or lavish cars. You must guide them to set a long-term goal that makes sense.
Create a roadmap for them so that they have enough money to stand on their feet. A place to rent, a decent job, and at least a month’s pay in the savings account are good to start for young graduates. Apply for instant cash loans if they need a head start.
Collective Efforts to Financial Freedom
After defining the financial goals, it is your moral responsibility to support them. If possible, help them set a budget and curb the expenses. Educate them about money management and some life-lessons for financial literacy.
Your experience can help change their spending habits. They might have procured some debts which seem extremely hard to repay. You can either repay them or help them find a debt consolidation loan.
The limited-time they will be spending at your home should team them valuable life lessons. Make sure you don’t put too much effort into helping them. It may lead you to a financial crisis.
Dr Sheldon Cooper taught the audience the importance of the agreement in any relationship and setup. It sets clear the roles and responsibilities shared by both the parties living under the same roof. The chances of a dispute will be minimal as compared to word-of-mouth agreements.
The importance of agreement increases in monetary issues. If you are lending them money, the amount, repayment schedule, and installments should be discussed in the agreement.
Set a Conflict Resolution Method
Some conflicts or disputes are bound to happen from time to time. The resolution method should be discussed earlier to prevent them from creating any damage to the relationship. The simplest approach here is to define a neutral person as a judge.
Make sure they are not biased towards one of the parties involved in the debate. Finding a person that both party respects and is not biased is never easy. Grandparents might seem the only option in this case.
In the end, your new roommates may leave after a short duration stay. If financial troubles are their reason to stay at your home, you must support them without hurting your finances. Make the conversation about finances sound not too stressful.
Description – The article mentions some tips to manage the financial situation when your parents or children move into your house.
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