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Taking Financial Stress out of Your Full Nest
Successful Money Management in a Multigenerational Household

With the recent downturn in the economy, you may have found that inviting a family member to live with you - whether it is parents or a child - makes more sense financially than living separately. But while a "full nest" arrangement can have a lot of advantages, it can also come with its own set of challenges. Remembering the following points can help you keep your multigenerational finances the more the merrier instead of the more the scarier.

When Parents Move In

Create a new budget - Any time more people are living in a household, additional expenses are bound to arise. Doing a budget to identify these changes will help to make it clearer what these expenses are and how they will be dealt with.

Draw up an agreement - This might seem overly formal for a family setting, but having an agreement about financial expectations can help you to avoid conflicts down the road.

Create time for review and input - On your family calendar, mark a day at least once a month when you can talk about finances. It can help to schedule this meeting immediately after an activity the whole family enjoys doing together, like going for a nature walk or watching a movie together.

Have fun money conversations too - Including your parents in discussions of how money will be spent on fun family activities will help to create an environment in which money talk doesn't always have to be a bummer.

If you run into trouble, seek help - If you find that your parents are struggling to meet their financial obligations, a financial counselor can help you analyze your situation and make recommendations for creating a financial plan that will help meet everyone's needs.

When Adult Children Move In

In addition to the all the above steps, living with an adult child requires a little extra effort since your houseguest may still be trying to map out a financial future.

Consider setting cash flow guidelines - Setting monthly standards for contributions expected in either direction can help to reduce friction in the future. Seeking input from your child on what they consider appropriate can also help to make your time living together go smoothly.

Have a "big picture" plan in place - In conjunction with the agreement to address month-to-month expectations, it is important to have a plan for the future. How long does your child plan to live with you? If the child is unemployed and looking for a job, what are the expectations for the job search? Addressing topics like these will help make it clear where each of you stand and hopefully avoid misunderstandings in the future.

Focus on using the time wisely - An adult child living with you may be going through a challenging time, whether it is recovering from a divorce, struggling to find work or a place of his or her own, or rebounding from a personal crisis. Your child may see this as a time of frustration, but it can also be an opportunity to work on areas of personal finance that might be more difficult or time-consuming to work on later. Encourage your child and provide goal-setting resources that will help chart a path for a promising financial future.

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