The Great Recession has forced many families to work together to save their homes, and in some cases those who did lose their homes had to move in with either their kids or their parents. Now, because of this, for the first time in America’s history, almost one-fifth of all homes include parents and adult family members.

This new dynamic has helped out in some ways, like having more people to help pay the mortgage, or having grandparents providing child care for their grandchildren.

This has long been a model that many immigrant families have used; and now, out of necessity, it has become more mainstream for all American families.

There are a couple of issues that need to be dealt with to make this change work well, however. One real concern is whether this has caused families to save more of their disposable income. This is important because, when not properly saving for the future, this can create a new problem while solving a pressing one. It can create a dependency that is not healthy in the long term. If people don’t fight the tendency to spend all their free cash flow, then a new set of problems will take over. It can take real focus to save when the list of “needed” things seems to be endless.

If this situation is where you now find your family, I suggest that you talk things out to agree on some ground rules- those things you are doing to prepare for a change should it becomes necessary.

The first suggestion then, if you have an adult child who has moved back home, is to be sure that they pay a reasonable amount of the costs of the mortgage and utilities from the beginning. Many studies have shown that all people value their independence above almost anything else. So when a situation, such as a job loss or a home repossession occurs, causes a combining of households, having them pay their way is essential for it to turn out well.

Parents will naturally, however, try and help “relieve” their kids of financial burden, thinking it is an act of love when in truth it is not; rather, it is almost always counterproductive to love. True love creates freedom and not bondage.

Not requiring a person to carry their own weight is the equivalent of allowing a person to not use their muscles, which in time will atrophy. Then when they are unable to do things for themselves they will blame their loss of independence on those they see as having helped create the situation.

So, the most loving thing you can do is keep up the financial pressure, which is the equivalent of requiring them to exercise, and in exercising, their body and their financial independence will keep them in good shape; allowing them to again go out on their own when the time is right.

It is not a loving act to create co-dependence, or dependence.

A second thing that will help make a multi-family situation work better is to agree upon a savings rate. Even if the new situation seems to be working out well for everyone, it still should not be considered a normal, long term answer because situations will change. Should the need arise, it is essential that the two families are saving enough, so they have the funds to put down on their own home when it becomes necessary. Healthy relationships don’t happen naturally, so to ensure that they stay healthy it is important to take the steps that will allow it to happen anyway.

The Loan Arranger

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