Many times in parenting, we are given a single piece of advice, though it may be phrased in a variety of ways: "Go with your instinct." "Trust your gut." "You'll know in your heart what to do." The problem, sadly, is that quite a few of those instincts are way off base when it comes to matters of money. What we really need is to know when we should stop trusting our intuition.
So, for this episode of the Motley Fool Answers podcast, Robert Brokamp and Alison Southwick invited New York Times best-selling author Beth Kobliner into the studio to give all the moms and dads in the audience some great tips on how to raise financially savvy offspring -- specifically, tips that run counter to what your first instincts might be.
In this segment, she hits a tough topic for parents whose children are -- at least technically -- adults: How do you handle it if they need to move back home after college? There's a common view that letting them return to their childhood bedrooms post-graduation will turn them into giant slackers. And no question, there are multiple ways that such an arrangement can go wrong for everyone involved. That does not make it a bad idea -- just one that requires planning and clearly laid-out guidelines.
A full transcript follows the video.
This video was recorded on May 15, 2018.
Robert Brokamp: And now the fifth instinct. "If I let my post-college kid move home, she'll turn into an even bigger slacker."
Beth Kobliner: Well, it could be true. I think increasingly as kids have so much student debt, moving back home is actually a great way to start paying off that debt, but you want to establish ground rules. Put it in writing. It sounds so crazy, but now as my daughter is about to graduate in May, I'm like, "Yeah, I'm going to put that in writing."
You want to say, "OK, you're home. We'd love to have you home, but that doesn't mean we're funding your lifestyle. We want you to start saving," and start saving for whatever your kid's goal is to help them start thinking about the future, because it's very easy of course, to move back home and feel like you're back home, and have Mom do the laundry and have everything taken for granted. So, putting it in writing and what those expectations are is important.
Brokamp: I actually moved back home for a brief period.
Kobliner: I did, too!
Alison Southwick: I did, too! For a few months.
Brokamp: And for me it was like for six or seven months, and mom said, "It's fine. You have to pay rent." It was pretty nominal, but she still said it was important that I pay rent. Luckily, I had grown out of most of my sloppy ways at that point, so it was not a complete burden that way, but it was very helpful, and there are plenty of other people. I think Robert Kiyosaki, Rich Dad, Poor Dad, I think he moved home at some point or another. It is helpful. Obviously, there is that line, though, of where you're doing too much of what is called financial enabling, or financial codependency.
Kobliner: Absolutely. I remember the opposite. I called my parents and said, "OK, I'm graduating from college. I'm going to move out on my own." My mom was first like, "What are you talking about?" Then she said, smartly, "Oh, OK. What are you going to use to pay for moving out on your own?" I had $10,000 in student loans and then I had a low-paying job in publishing that wasn't going to pay for rent.
I think that experience of having to move back home -- I lived back home for a year. I paid off my student debt. You live so frugally. I was very careful with my money at that point. And it does put you on better footing. And I think the reality is to have kids assume often if they can, that they can move back home and start saving some money and maybe chipping away at that debt.
Southwick: It's kind of like training wheels.
Southwick: Eventually the training wheels have got to come off.
Kobliner: It's interesting. I was talking to someone. I was on a show, and the host of the show turned to me after it and she's like, "My grown sister got married and she moved back home with her husband." They were living in the parents' house and she was like, "I don't think that's a good idea." It's that enabling situation that really starts to get a little tricky. I think it is important to have these conversations, but if your kid is pushing 30 and they're still home and you're doing their laundry, it's time to reconsider.