Should parents charge rent to their live-in adult children?

LABADIE, Mo. (KSDK) - Whether it's convenience or the economy, more and more adult children are living at home. But should they pay rent?

So many parents are taking in so-called "boomerang kids," especially since the recession. To charge rent or not to charge them rent, that is the question. Here are some answers.

In a beautiful log cabin in Labadie,Missouri, life is sweet for Ruth Ebinger's 23-year-old daughter Ellie, who just moved back home with her family.

"She went to Lindenwood to school, moved back home, got a job, and here we are," Ebinger said.

Her mom's cooking hasn't changed but not everything is the same.

"The difference is she's paying all of her own expenses."

Expenses like her cell phone and car insurance, but the newly employed school teacher does not pay to live under mom and dad's roof.

"We decided that as long as she did have a plan that we weren't going to charge rent," Ebinger said. "When I left home, I didn't know anything about taxes, I had never paid bills. I will feel that she's prepared."

Ellie is what's known as a "boomerang kid." They fly solo for a bit but eventually come back home.

"These kids are coming home, with or without jobs. And they're not 18 anymore," said Robert Ferguson, a financial advisor with Millenium Financial Group.

Ferguson, who has clients with boomerang kids, thinks they should pay rent.

"The goal, actually, is to establish financial responsibility, which then, in turn, gets them out of the house," he said.

So how much does he suggest parents charge?

"Usually around 30% of what the child makes, assuming there's a job," Ferguson said.

And the child does not have a job?

"You have to figure out a way to motivate them to go to work. Having said that, there are a lot of part time jobs that are out there," he said.

Ferguson also offered this additional advice for parents: if your adult child moves in, you have to set the rules right away or else it will get more difficult down the line. He adds that some parents are getting creative when it comes to charging rent. Some parents who charge their kids rent are then giving the rent back to them once they move out. The financial advisor said if the parent can afford to do that, that's not a bad idea.

For this mom, who doesn't charge her boomerang kid rent right now, Ebinger said she could go from mom to landlord if her daughter plans on an extended stay.

"You can't let it go on and on and on," she said. "Yeah, she can stay here, she can stay here. But she would have to pay rent at that point."

We put this question on our Facebook page recently and were blown away by the amount of parents who are going through this right now. So, we decided to explore this topic a little more.

Licensed professional counselor Bonnie Rudden has seen this issue with her clients.

She says there's not a yes or no answer, and it depends on the situation.

Situation No. 1:

Let's say the adult child has a decent job, but also has debt. She says they could live at home rent-free to pay down their debt, as long as there is a timetable in place. Say, a year.

Situation No. 2:

But what if the adult child doesn't have a job or is under-employed? Then she thinks it's important the adult child agrees to do chores and run errands, for the period of time they are allowed to stay in the house. A timetable is key.

Situation No. 3:

And if they do have a job and move back home? Here's her opinion.

Rudden said, "I really think they need to pay rent, yes. I think it's a wise thing. That's a whole different case of we don't want them to start wasting their money, spending it on frivolous things that they don't need, and that can easily happen. So that's what we're trying to build at this point. Responsibility in them, getting them ready for the real world. There again, the timetable is very important."


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