When Your Adult Child Comes Back Home

Kids and Money / Thursday, August 14th, 2014

We’re living a cliche: Our daughter – who graduated from college in May – is living in our basement.

When you hear that do you picture a kid eating Doritos and watching Netflix all day? Yeah, same here.

But on the contrary, Lindsey’s gainfully employed and she actually moved home at our suggestion. It seemed like a good opportunity to let her ease into the world of adult money matters without taking on a rent payment right out of the gate.

(As a side note it worked perfectly into my plan to have her return home at the same time her brother was getting ready to go to college. I know an empty nest is inevitable, but our excellent family planning a/k/a dumb luck means I don’t have to face it quite yet.)

In addition to keeping expenses low, having her at home has made it easy for us to help her navigate some of her first financial decisions, post college. Here are some she’s tackled so far.

Room and Board

Her room and utilities are on us. We’re not asking her to pay rent, although she is putting the equivalent of a rent payment into savings each month so that she knows what making that kind of a payment feels like. The bonus is that she’ll have a nice financial cushion available when she does decide to move out.

And food has been a non-issue. She makes her own grocery store runs, but she’s welcome to eat our food too.

Health Insurance

Lindsey already had a crash course in the economics of health insurance when our family switched to a high deductible policy plus an HSA at the first of the year. That change took a little adjusting for all of us.

And it turns out that being able to fluently speak the language of deductibles, out-of-pocket maximums, and preferred provider networks came in handy as she waded through her insurance options at her new job. Once she did that, she and I compared the costs of the various work policies to the cost of her staying on our family’s plan, and she opted for one of the work policies.

(Confession: she had double coverage for a month or so because I wanted to be double, triple sure her work coverage was in force before I dropped her from our plan. I’m not going to lie: not providing your child’s health insurance for the first time in 22 years is a weird feeling.)

Car Expenses

Lindsey’s car is a paid-for Saturn Vue that my husband and I bought for her used when she was in high school. Lindsey’s always paid for her own gas, but now we’re handing over the other costs of car ownership to her too.

When the property tax bill for her car came this month – all $96 of it – we passed that along to her. We also made arrangements for her part of the auto insurance premium to be billed to her separately.

As far as repairs, we’re kind of holding our breath. Honestly? I wouldn’t be opposed to her buying a new or new-to-her car. Something modest, but a late model with a reliable track record.

But she loves her car. Really loves it. And it hasn’t given us a lot of trouble, all things considered.

One thing you might have noticed as I write about these expenses she’s taking over, is that we, her parents, are getting a bit of a raise. That’s true, and it’s nice, although it’s all being sent down I-70 from Kansas City to Saint Louis University.

But there is one part of having her home that I’m really enjoying: she’s a built-in dog sitter. It makes going out of town or even taking a staycation that much easier.

14 Replies to “When Your Adult Child Comes Back Home”

  1. Yep, yep, yep been there twice. Now my two older daughters are COMPLETELY on their own, and it feels good. It was very hard having my grown up daughters live with us after college. They would resort to the daughter role, instead of adult at times. Once they were totally on their own, it was wonderful for all of us. I still had two little ones at home at the time, so maybe it was a bit different for me.
    Now that my third daughter is going away to school (in less than a week!), I’m feeling the empty nest. Although I’ll still have my son home for one more year, it’s getting really close to being a full empty nester.

    On a side note, I thought VA was the only one with abnoxious personal property tax. Sorry to hear that you have to deal with it too. I just got my bill for three cars – $1,091. Ouch.

    1. Sharon, our bill for three cars (not including Lindsey’s) was $761. Taxes, insurance, gas, repairs…cars are so freakin expensive!

  2. Hi, My youngest is the same age as your daughter, and the only child who has remained in our home town. He has a good job and decided to rent his own apartment walking distance to his job, although we did encourage him to stay home for a few months to build a small cushion too. We love having one child living locally! He comes home for dinner once or twice a week, (with his dress shirts!), and it is just as nice when he goes back to his own place.

    I have a question about the auto insurance for you. He is on our family auto policy, his portion being about $900 per year. To put him on his own policy it is about $1,200 per year. The car he is driving is in my name, and we have decided to “sell” him the car to limit any liability we could incur if he were in an accident. We never thought about this until a friend mentioned it. He has no assets, whereas we could be really cleaned out if some horrific accident occured. So now he will have his own policy, but we will pay the difference. It is worth it to us. Am I missing something in this scenario, as I think your husband is in the insurance business! Thanks.

    1. Sherri, I sent an email to my in-house expert. I’ll let you know what he says. Sounds like you have a lovely setup with your son in town.

      1. Julie, would you write a post about this when you get an answer? We’ll be in the same situation next June. Our oldest daughter has lived at home all through college and she says she’s ready to live on her own! Haha!

        1. Ladies, here’s how my insurance agent/father of my children answered:

          “Since I’m not your agent and don’t have access to all the account information, my answer is pretty general in nature. However, based on the information provided I think you’re on the right track. Since your son is no longer a resident of the household and is living on his own he should have his own auto insurance policy. In order to secure that policy the vehicle would need to be in his name as well.”

          Does that help you guys?

  3. Julie,
    This is a great post! I’ve just started mulling over this subject because our oldest son is a junior in college. He will graduate at the same time that our youngest son graduates from high school & heads to college so in theory we should be empty-nesters at that time. However we live in a Virginia suburb of Washington, D.C. and the cost of living is quite high. If our oldest son should decide to return here after graduating, then living at home for a while would help him get his feet under him financially. He’s also contemplating law school so living at home for a while would allow him to save toward that. All that to say that your post is very timely and I’d love to hear more as you go along.
    Elise Sutherland

  4. Hi Julie – thanks for the update!

    We are also on a high deductible plan with an HSA..it’s important to realize (as we did) that if your child cannot be claimed as a dependent, you cannot use HSA pretax funds to pay their deductible. For whatever reason, when they changed the law to allow plans to cover children until 26, the HSA part of it still expires at age 19 unless you can claim them as a dependent.

    1. Eileen, great info. I had no idea. Fortunately (?) we have more than enough of our own expenses to pull all of our HSA funds out without using her deductible, although we’re trying to leave them in place for retirement. But it’s good to know for future reference. Thanks!

      1. Yeah, I think it’s pretty convoluted because depending on how expenses mount in a given year (along with what you anticipate their dependency status to be vs what it is) it would impact you financially different.

  5. This may be a bit much but have you thought about letting her live at home until she has enough for a 20% down payment? It would be pretty awesome never having to pay rent.

    1. Interesting idea, William. We would be willing to let her, but buying a house isn’t on her list of priorities right now. She’s in KC for the time being, but she has the kind of career that could take her elsewhere. I think she’s more focused on that right now.

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