Debt is really a big nuisance in most American household. The bigger it is, the more problems you will face. The effects of debt to your family is really something terrible and you want to keep that from happening.
The recent recession changed a lot of things about the average American family. We are not only talking about the family finances but also the living conditions. Usually, young graduates are quick to move out of their parent’s home to seek out financial independence. But with the current economic situation, more and more of them are beginning to delay this. Some of them are even moving back in.
With the combined problem of student loans, credit card debt and tough employment conditions, graduates seem to be finding it hard to venture out on their own. This is seriously affecting the family finances of most Americans.
Financial difficulties are pushing Millennials to move back home
In a recent research done by the Pew Research Center, 36% of young people who are between the age of 18 to 31 are currently living in their parent’s house. That was based on a 2012 survey. Most of them moved back home after graduating from college.
A lot of these Millennials moved back so they can start saving up before venturing out on their own. Some people tried but failed to get a job that is enough to support themselves financially. Regardless of the varying reasons, it is evident from the statistics that the main reason is an economic related.
College students are burdened with two debt problems, student loans and credit card cards. These can add up to be a significant amount. Even if the graduate is able to get a job immediately, they will be unable to put aside money for savings if they continue to live out on their own. It will be difficult for them to get a firm foothold on their financial dreams if they opt to prematurely live on their own resources.
At the same time, parents will be able to put in more money into their own mortgage and other debt payments if they have their kids chipping in the household budget. This is especially helpful if they are already retired.
These are only some of the scenarios that led three out of ten Millennials moved back in their parents house when the recession happened a few years back. While it seemed like the most economical option for all, it still put a strain between relationships – especially when family finances are on the line. The independence that adult children experienced when they were on their own is hard for parents to deal with. At the same time, Millennials feel like their parents are trying to navigate their lives once more – just like when they were kids.
How to rearrange your household budget
As difficult as it may be, there are ways for parents to cohabitate peacefully with their grown up kids. It all takes some calm meetings and a merging of family finances.
Here are three things that we suggest you do.
Boost up communication. For the parents, they have to understand that their kids are all grown up and they should be given a say when it comes to household management and rules. Ideally, this has to be done as soon as the kid moves back in. Talk about personal boundaries so you avoid offending each other. Even if it is the parent’s home, it is only proper to give the child a voice. That is one of the ways they can be trained to think for themselves.
Learn to give and take. With all kinds of relationships, there must be a compromise. Make sure you give and take so that no one is abused. Understand that both of you have needs and home quirks that has to be respected. If there are rules that the child wants to change, parents should hear them out. The children, on the other hand must always respect the fact that the home is under the ownership of their parents. And being the elder one, they should be kept in the loop when it comes to any financial decisions.
Create a new household budget. In most cases, you do not have the same income pouring in. It can be bigger for the kid or the parent. Regardless of that, you must be conscious enough to be fair when it comes to pitching in the household budget. Always be considerate when you are combining family finances. To avoid any misunderstanding, discuss who gets to pay for what. Or how much money should be put into the household fund.
Apart from the family finances, parents and children should share responsibilities to make both living conditions pleasant for everyone. Both love each other anyway and it should be an easy thing to do. There is no better person to give help than family members – just make sure that it will not be abused in any way. If you need to create a new budget plan, you can always look into new templates. Use Google Drive to search for new templates that will work well for the both of you.