Don’t let big kids pick your pocket
Many grown-up children have had to move back in with their parents to cope with the economic downturn – but those parents need to ensure that caring for their children and/ or grandchildren does not put them at financial risk.
That’s the word from Berry Everitt, MD of the Chas Everitt International property group, who says: “We see that with the economy still shedding jobs, many young people who can’t keep up their rent or bond repayments are moving back to their parental homes.
“And it’s a hard-hearted parent who will not take in their children in these circumstances. However, such arrangements can put stress on relationships – and the parents’ retirement plans – unless all parties approach the matter with reasonable expectations.”
He suggests that at the outset, parents and the grown children who are moving back home should sit around a table and thrash out a sensible plan – putting financial needs and expectations at the top of the agenda.
“Firstly, families should be very careful not to fall into the trap of reverting to old habits and behaviour, dating back to when the children were still young and their parents were solely responsible for all expenses,” he says. “Even if the children are unable at this stage to make a financial contribution to the household, they should be willing to do other things to keep things running smoothly, and perhaps help their parents to cut down on expenses.
“They could, for example, take over tasks for which their parents usually pay outside contractors, like cleaning, maintenance and gardening. Grandchildren can be expected to help out too, by taking on some household chores. And then everybody in the family needs to understand that the budget is only likely to cover necessities and that they will all have to live carefully.”
Secondly, Everitt says, parents should vigorously resist any pressure or inclination to dip into their retirement funds to get their children out of debt. “At their age they will find it difficult to recoup any capital sum and even if their children do later find jobs they, in turn, will find it difficult to reimburse the money because they will need their earnings to set themselves up again.
“It’s quite enough for parents to give their grown children and any grandchildren a home and to provide emotional support while the children sort out their own debt positions and repayment arrangements.”
Third, the family should discuss personal boundaries and “house rules”, he says. “It makes matters easier if the property can accommodate different parts of the extended family in clearly demarcated areas to allow everyone some private space. But even if that is not the case, relationships can be kept sweet by openly discussing needs and expectations and reaching any compromise necessary up-front.
“And lastly, it should be agreed that parents will remain the ‘boss’. It is their home and their decisions should be final. This is especially important where grandchildren are involved since they may instinctively look to their parents to make decisions. The situation should be carefully explained to them so that they are clear about any rules their grandparents may insist on.”
Issued by Chas Everitt International