Living in a multigenerational household has both advantages and disadvantages, particularly when it comes to finances. While the increasing cost of living may prompt you to save money by moving back in with your family, it can also be challenging to distinguish between your personal finances and those of your family.
GOBankingRates consulted experts to discuss the financial benefits and pitfalls of living in a multigenerational home. One benefit is the significant savings on housing expenses when expenses like rent, utilities, and internet are shared among family members. This can make living in a desirable area more affordable, especially in a time of rising housing costs.
Another advantage is the lower cost of food when buying supplies in bulk and sharing meal preparation. This practice can reduce food expenses, minimize waste, and help families stick to a budget. Additionally, living at home can lead to reduced caretaking expenses, as grandparents can help with childcare, and younger family members can assist with eldercare, resulting in both financial and emotional benefits.
However, there are potential pitfalls to consider, such as blurred financial boundaries. Tensions may arise among family members over financial responsibilities if they are not clearly defined from the beginning. Disagreements can also occur regarding budgeting, spending priorities, and differing financial values across generations.
Another challenge is the risk of financial enabling within a multigenerational home. It is important to establish clear communication and boundaries to prevent misunderstandings and potential conflicts related to financial contributions and responsibilities.
“If family members are not managed carefully, they may end up neglecting important long-term financial goals to compensate for the financial burden caused by others. There is a delicate balance between supporting a family member and inadvertently enabling unhealthy financial habits, as stated by Pettersson. According to Pettersson, if one generation is financially supporting another without any sense of responsibility, it can lead to long-term financial stress and bitterness. While multigenerational living can be a wise financial decision, particularly in times of economic uncertainty, it necessitates clear communication and mutual expectations. When approached correctly, it is not just about saving money; it is about creating a stronger financial future together.”
