#TalkMoney week – answering a popular question
The question “Should I charge my adult Son/Daughter to live at home, if so how much?” is one that our Money Advisers get asked often, when helping people with their financial management. Children are living in the family home for longer, some well into adulthood, and it can help them to avoid spending money on rent in order to save for a deposit. However, isn’t it only fair that they contribute? Here are three key tips from our Money Advice Team:
* Have an adult conversation about the family finances. Financial education is limited in schools (our money advice team runs a programme for this, and this offer has only been taken up by two schools so far). Most financial education will be learned from parents, so get talking. By avoiding talking to them about finances and preparing them for when they move out, you may even be storing up problems for them in the future by enabling them to get used to spending money on non-
essentials which they will find hard to reduce when they do move out.
* Produce a family budget. There are apps available for this, but a spreadsheet or notebook should do just fine. As family finances, become intertwined, it’s important that everyone understands the budget and is transparent about their income and expenditure.
* Demonstrate how much it would cost if they lived independently. The following figures give an example of how much someone may be paying per month if they worked and lived independently:
Rent: £462.00 (average rental cost of a 1-bedroom property)
Council Tax: £120.89 (based on the annual cost of a Band ‘A’ property, payable over 10 months)
Electricity: £40.00 (this will be considerably higher if there is no gas supply)
TV Licence: £13.00 (although this will be higher for the first 6 months)
Total: £715.89 per month
As well as the above priority bills, there will be additional costs to cover food, travel, phone and other essentials.