Why You Should Charge Adult Children Rent

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Welcome to the 8th Smart Money Debate at ReadyForZero! To see the other side of this debate, read Melissa’s post: Why You Should NOT Charge Adult Children Rent. And then let us know which argument was more convincing!

This post was written by Jana, author of the wonderful personal finance blog Daily Money Shot, where she discusses money, family, relationships, pop culture, and everything in-between. You can also find her on Twitter and Facebook.

Why You Should Charge Adult Children RentAsking a child to pay rent upon moving back home is undesirable, yet necessary. As a parent, it is hard for me to think about ever asking my child to pay to live in her own home. While she’s a child, that is. But if she’s finished college, has a job and simply wants to move back home because it’s easier, I can’t think how giving her a free ride would be at all beneficial to her in the long run. It wouldn’t make sense.

In fact, my husband and I have talked about this topic (granted, our child is almost 6 but why not discuss something that may or may not ever happen) and what we would do if our daughter came to us wanting to move back home. We’ve decided that we’d absolutely charge her rent. Maybe not the rent she’d pay living on her own in an apartment, but she would pay something. And here’s why:

Decreases parental dependency

Living rent-free in your parents’ house is a surefire way to continue to be dependent upon your parents. You rely on them for all the same things you did as a kid—a roof, food, utilities. Maybe not food or gas. But one guy I knew even had his mother still doing his laundry and packing his lunch for work every day! He came to rely on his parents so much that he actually didn’t know how to do much for himself.

Being dependent on your parents is not a great way to become an adult. By paying rent, that helps to break the dependency cycle and makes the adult child contribute to the household. Then he’ll feel like he has a stake in what happens and may step up and take charge of other areas of his life (additionally, the parents have to say no to performing these types of tasks in order for the dependency cycle to be fully broken).

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Encourages smart financial choices

And to cut frivolous spending. Many of the adult children I’ve known living rent free in their parents’ homes wasted money. Every meal was purchased. New DVDs every Tuesday. Every weekend at bars and clubs. New clothes, expensive cars, and yet, they complained about never having any money and not being able to move out of mommy’s house because rent is too expensive.

Had their parents asked them to pay rent, they’d cut back on much of the unnecessary spending and get a hold on how to pay their bills. Then they’d be able to move out on their own, making them more independent and responsible for their own financial choices.

Encourages responsibility

It’s hard to separate this one from making smart financial choices because really, they go together. When you mandate your child to pay rent—no matter how high or low—you are giving them a tool to learn how to be responsible for their money.

Paying rent is just like paying another bill and part of being a responsible adult is paying your bills and doing so on time. And, just as in real life, there needs to be consequences for late payments. Whether that’s a late fee or interest or something else is up to the landlord (read: parents) but a child will never learn to be responsible for his or her money if there’s no reason to be.

Just so you don’t think I’m completely heartless, there are two exceptions I’ll concede:

  • If the parent and child discuss logistics ahead of time, and the child is moving back home to pay off debt or save money for something big (like a house or graduate school or wedding), then not asking the child to pay rent is totally acceptable. However, it must be agreed upon by both parties and there must be some sort of tangible proof that the money is going towards the stated goal and not towards enhancing a wardrobe or an incessant need to buy electronics. I’ve seen this type of arrangement in action and it really does work.
  • If the child can’t find a job. If there’s no job, there’s no income and therefore cannot pay rent. However, if that’s the case, the parents must step in and make the child contribute to the household in some way. Whether that is doing housework or running errands or cooking meals, the child needs to be more than a lump on the couch.

As much as I’d like to say I’d be one of those cool moms who’d let my baby move back home with me and live rent free until she gets her finances in order, I know that I can’t be. Doing so is a detriment to her in the present and in the future.

Besides, knowing me, I’d put the rent money in a savings account and give it to her on her moving out day.

What about you? Share your opinion in the comments below.

To see the other side of this debate, read Melissa’s post: Why You Should NOT Charge Adult Children Rent. And then let us know which argument was more convincing!

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  • http://twitter.com/RFIndependence Pauline

    I would not charge my child rent, unless he is really crashing at my house like it is a hotel and I have to do laundry and feed his girlfriend. I come back in between houses and stay with my mum, and don’t pay rent or food. I cook for myself, clean, and the last time even painted her living room. But she is doing well financially and money she doesn’t spend now will be my inheritance, taxed at 50% by the government. I’d rather enjoy it now. That said, I think the most I have stayed was two months at a time.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      That’s an interesting point about taxes. If you were to pay your rent to your mother and then gave it back to you later as a gift or an inheritance, it might be taxed twice.

      • http://twitter.com/RFIndependence Pauline

        Actually my mum even gets a tax credit for adult children living at home. It is not much, about $500 off tax per year, but about covers what I use in extra utilities.

        • http://www.twitter.com/bwfeldman Benjamin Feldman

          Wow, I hadn’t thought about that. I guess that’s even another reason why it makes sense for her.

  • Bob

    I think it depends on your relationship with your parents. I’m in a situation now where I’m falling apart financially after college. I asked my mom if I could move back in, and she acted as if I was just annoying her and asked if I could pay rent. Big guilt trip. Being the kid that needs help I ask: Why live with your parents and pay rent if you could live alone or with a stranger and do the same? Maybe living with your parents is nicer for some, but historically In my situation it hasn’t been. I thought I could ask for help and I couldn’t. I don’t feel like I have a family anymore.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi Bob, I’m sorry to hear about that – it must be frustrating! I agree that if things are financially precarious for the son or daughter, it makes sense to try to save money by living at home. And if the parents can let them stay for a time, that is ideal. Of course, I understand that sometimes there won’t be room in the house or the parents themselves will be struggling financially in which case providing free rent might not be feasible. But in cases where it is feasible, it makes sense to me. Anyway, I wish you the best of luck in dealing with this situation.

  • cc

    I’m pretty late to this discussion but I had my first job for over 4 years and having no children allowed me to work all the OT they offered. I was/am still living with my parents. (very fortunate) however I did have a car payment/insurance/gas, cell phone bill,and numerous hospital bills. So after all my bills were paid every month my priority was to save every penny I could. I opened a second account to have a small amount transferred to earn interest (to quickly save a fair amount for nursing school) I bought my own groceries,toiletries,clothes..you name it. I never once asked for a handout or expected anything. If I needed it I bought it. Unfortunately I was let go and unemployed for close to three months. Keep in mind I saved a pretty decent amount to sustain myself for a few months. I literally ate rice and beans and hardly left the house to save gas. My step dad after my job loss asked me to pay the electric bill, he said I could pay $200 and whatever is left he’ll pay. And that I should fight my unemployment because he needs help with his bills. I was BLOWN AWAY to say the least. I have my own bills to worry about with no income stream. I am grateful to have somewhere to live rent free but I busted my ass to save for school to earn a degree to be able to move out and live my own life. My other 2 sisters (step,so different grandparents) did nothing like that,both moved out right away and were always getting hand out from my step dads parents. And yet he says I have to pay to help him. I can’t see his reasoning any way I look at it. In the few months I was unemployed my account came extremely close to $0 and my savings for school was gone. And that school money went to his electric bill. Ive been at my new job for 9 days and he already wants me to pick up the bill again. I just can’t help but think what if I didn’t live here,who would you bully to pay your bills then? I would love a place of my own but my money is tied up in bills and saving for school. Rant over,it is just so incredibly frustrating!!!

  • Joe

    I have a problem. My parents are going to be kicking me out soon,because I don’t pay rent. I’m 19, graduated school about 4 months ago, and have no job. I used to have one but quit because they were only giving me 4 hours a week. They we’re also mistreating me and I thought $25 a week wasn’t worth it. But my parents, mostly mother, calls me names and makes fun of me. She says I’m an embarrassment, I’m a scumbag, retard, bum, and many other things. She screams at me everyday yelling at me to get a job because I’m a free loader, and If she catches me sleeping when she gets home from work at 9am. I have been looking, and tried to get one but nothing yet. I just wanted a little bit to relax and get my bearings on what I want to do. But they won’t let me have any slack. Am I wrong in this?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi Joe, I’m really sorry to hear that. No mother should call her son names like that. I’m sure you don’t deserve that kind of treatment, and it must be very hard to deal with. Personally, I don’t see anything wrong with a 19 year old taking a few months to find a job. In fact, it seems pretty natural to me.

      With that said, it sounds like your parents are not going to support you in this, which means you’ll have to make other arrangements. Hopefully you have someone else in your life that can help you during this difficult time.

      Either way, be sure to check what other resources are available. This blog post might help: http://blog.readyforzero.com/what-happens-if-i-lose-my-job/. I’m sure things will sort themselves out eventually. Good luck!