College graduation is right around the corner, and more and more grads are moving back home with their parents, rather than moving out on their own. For parents, having your child back home can be great, but it will also impact the financial situation of all parties involved. Here are some things to consider before welcoming your child back into the nest.


Whether you’ve been an empty-nester or you’ve still had other children living at home, having a child move back home is still adding another person back into the household. This probably means spending more on food and your utility bills will increase. Before your college grad moves back home, estimate the change to your monthly expenses so you can plan accordingly.

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Set Boundaries

One of the biggest challenges of allowing your college grad to move back home is setting ground rules. It’s essential to have some discussions about financial responsibilities before your child moves home to avoid confusion or confrontation down the road.

If your graduate is employed and making money, decide whether he will be responsible for paying rent or contributing to household expenses in other ways once he moves home. You can base this on the change in your budget calculations.

Of course, you’ll always want your child to be taken care of, but at this point in time, you should treat your grad as an adult. As a result, it will benefit both of you to give your child some financial responsibility. You may want to frame it this way when you have the initial conversation.

Most likely, your child will want to be treated as an adult in other ways upon moving home (no curfew, more privacy, etc.), so emphasize that contributing to household expenses is part of being treated as an adult in your home. Consider framing the conversation as if you’re empowering your child rather than punishing him.

Discuss Saving

Most college grads who move home do so to save money. You should still allow your child to make their own financial decisions, but you may want to encourage your grad to put the money their saving away into a savings account.

This is likely the beginning of your child’s journey of managing their own money, so while they should have the ultimate say, providing some guidance is what you’re there for as a parent. Also, beginning to contribute to a retirement fund is a wise move for young adults living at home.

Your recent grad will benefit greatly from putting money into a fund with compound interest so early in their adult life. You may want to also consider discussing the importance of having an emergency fund.

While having an emergency fund may not seem as pressing when living at home, it will be beneficial when your child does eventually move out, and they should have the spare funds to build one up with relative ease.

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Focus on Your Own Finances

According to CNBC, parents spend $500 billion a year supporting their children, while only putting $250 billion into their own retirement funds. When you have an adult child living at home who is just starting out in the “real world,” it’s tempting to focus on making sure they’re taken care of financially.

However, sacrificing your own financial goals in the process is not the right move. Once again, empower your child to use their own money to take care of personal expenses, such as travel and going out with friends. And if you’re still paying your child’s cellphone bill, car insurance, or student loans, you may want to consider scaling back and eventually cutting off your contribution entirely.

But once again, be transparent with your child about this process and why you’re making these decisions. You’ll be setting your grad on a path to financial independence and the ability to be confident in their financial decisions, while still ensuring that you’ll still be able to focus on your own financial goals.

Having your college grads move home can be a win-win situation for everyone involved. You get the pleasure of having your child back in your home, and your graduate receives the benefit of saving money.

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However, having your college graduate living at home is not always easy, and considering the financial implications for both you and your child is essential. The key to success in having your college graduate move home will be to set clear guidelines, empower your child to be financially independent, and continuously communicate.