Reader’s Digest article: Happy Money

Posted Thursday, April 11th, 2013. Filed Under My Daily Dose

This article is geared to the empty nester whose children are returning home from post-secondary. Here are tips about setting boundaries with your child and for yourselves.

1. Make a Budget – your financial plan should be able to weather all kinds of curve balls. When your child comes home you need to look at the extra/added costs of having him/her at home. For instance increased cell phone package, increased data package, and adding your child to your car insurance. All of these add to your monthly expenses/costs. Can you afford it?

2. Know the Goal- Kids need to have a clear reason for returning to the nest. Don’t let them crash at home until they do. I know the marketplace is tough. You will have to discuss this.

3. State Your Terms – Be upfront about what you are prepared to do for your children, i.e. about laundry, cooking, shopping, etc. Everything needs to be discussed before your child moves back home. Set the expectations with them at the outset, financially and otherwise.

4. Charge Rent – When I moved home from University before I moved out of my parents, they did not charge me rent. I did work and save. I like the idea suggested in this article. Even with a student-debt you want to teach your child to be financially responsible. Just as your child would write a rent cheque every month, have the child contribute a set amount monthly, i.e. $150/month so they are simulating the real world. At the time your child moves out, give them back all the money (becomes a forced savings) as a lump sum when he/she’s ready to leave. It’s a good head start.

5. Set a Deadline – When your child decides to return home, a discussion needs to occur about what is going to happen. Set a time limit. Negotiate however be sympathetic and open-minded.

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