We have a brand-new child-financial situation to deal with: what to do, financially, about an adult child who is working full-time and living at home.

I will start by telling you what we did about children’s income when the children were still in school, because it feels relevant. A child working part-time (like during the school year) put half of their earnings into their own college fund, and kept the other half. A child working full-time (like during the summer), put 50-70% of their earnings into their own college fund and 10-30% into charity/investment (we gave them some input on those proportions, up to the 80% point, depending on their own priorities and also on what their college cost), and kept 20% for themselves. Well, I mean, almost ALL the money, except for charitable contributions, was For Themselves. But we used “for themselves” in this context to mean “money to do whatever you want with.” (If any of them had opted not to attend college, their own personal college savings accounts would have been turned over to them when they graduated high school and moved out.)

Now for the first time we have an adult child, a college graduate, who is 25 years old, has a full-time job, and lives at home. When I graduated from college, I could get a minimum-wage job at a bakery and just barely afford to live in a cheap/crummy one-bedroom apartment (two flights up; living over a business; literal shag carpeting that didn’t bear thinking about too much; a large window IN THE SHOWER; no a/c and most of the windows didn’t open / didn’t have screens; heat adjusted by the landlord; iffy hot water) with those wages. After that, any improvement in my circumstances (getting a raise; working overtime; getting a higher-paying job; getting a roommate; etc.) represented a big step up, and that was very motivating and encouraging, and felt good and right to be progressing that way through life.

That is not the time my kids live in. As I understand it, you will all understand what the rental market is like right now; but in case you live in one of the few areas where this is not the case, or in case you have not looked into it recently, I will explain that someone working full-time at a medium-low wage cannot practically afford a one-bedroom apartment, even if there were many one-bedroom apartments available, which there are not, and especially if they have significant student loans to pay back.

But I will go on to say that it seems Deeply Wrong to me to have an adult earning a full-time paycheck and getting to treat the whole thing as discretionary money, while someone else pays for their groceries, electricity, hot water, etc. It doesn’t just seem deeply wrong on a Rightness level, it also seems deeply wrong on a TRAINING/LAUNCHING level.

Even though things are harder than when I was this age, I still want to take a shot at training the idea that it’s pretty normal to start out just barely scraping by and then gradually do better over time. I don’t want the kids to start by spending a full-time wage on whatever they want, and then feeling like take a 95% pay cut when they move out and have to pay their own normal expenses. It’s not that we want to profit off their earnings (we would not be profiting in any way off their earnings); it’s that I think it is good for them to find it normal that an adult would contribute financially to the household that they live in, and to get used to the idea right off the bat that you DON’T get to spend all of your income on fun stuff. I feel like we already made progress on this when we made them divide their earlier earnings, and I’d like to continue that progress.

But: how MUCH should an adult child contribute to the parents’ household? How much. And how to DECIDE how much.

Additionally there is the tentative, sticky feeling we have about trying to tell a grown child what they have to do with their money, when we don’t actually have jurisdiction over that anymore. Sure, we could threaten, and we could say they have to pay what we say or they have to move out, but let’s be serious. I am not going to do that.

We could try to figure out what their actual household expenses were, and make them pay that. What part of the hot water bill is theirs? What part of the grocery bill? What part of electricity? How much car insurance, how much gasoline, what percentage of car maintenance/repair if they are using a family car? What is the value of their bedroom plus access to a bathroom, kitchen, living room? That sounds exhausting, and I don’t want to. Plus, I feel like there is a difference between what a kid working at a fast-food place and needing to live at home should contribute, versus what a kid working as a doctor and preferring to live at home should contribute. This seems like a good place to add that I don’t object philosophically to the idea of a kid preferring to live at home. I’m not pining for an empty nest; and I think multi-generational living can be very practical in many ways, and may be the way of the future in this housing market.

My friend Jane says that back in 2009 when she was in a similar situation to ours, she charged her son $600/month. Adjusted for inflation, that would be about $934/month today. Initially that seemed…high. I asked her how she came up with that number, and she said she thought she had looked at comparable rental costs, adjusted downward because it was living in his childhood bedroom in his mother’s house rather than in his own apartment, and then added a chunk for groceries and utilities. Well, that actually seems about right: less than $12,000/year for room/board/utilities and the use of a car. In fact, it seems affectionately low, adjusted for parental love. A kid making $24/hour, or $48,000/year, would be keeping 75% of their income. Well, let’s say 60-70% of their income, after taxes.

Elizabeth and I discussed the topic as I drove her back to school. She is a senior this year, and remarked that she would need to be careful what she suggested William should have to do, since she might be subject to those policies herself next year. We wondered about doing it more like a flat percentage, and about making it so that MORE of it went to the kid’s own benefit—as we did when we made them save for a college account that would be theirs if they didn’t go to college. What about something like this, if we were confidently in charge: they have to put 50% of their earnings after student loan payments into a savings account for their future launch (first/last month rent or down payment, furniture, etc.), and they have to put 25% of their earnings toward the household, and they keep the remaining 25% for themselves? That would be a lot more spending money that Paul and I had for our first couple of decades, but it would at least APPROXIMATE normal adult spending, AND be an actual contribution to the household, AND it would establish a Launch Account they would presumably end up being very glad for, which would teach them about how savings really add up. Does that seem like a good Training Wheels Budget for an adult child living at home? Imagine yourself at 25: does it feel like something you would accept? Well, that’s kind of hard for some of us to imagine, isn’t it. Different times.

DID you live for a time with your parents as an adult while working full-time, and what was the financial arrangement if any? Do you or did you have adult kids living at home and working, and what did you do about that financially if anything? Or do you happen to know someone else’s set-up? Do share. Different things are going to work with different families in different circumstances, so let’s build a collection of options to consider.