My son, who is 7, had a t-shirt he used to wear that said, “I still live with my parents.” I loved that shirt because it always got laughs from people who recognized the irony.

Clearly, if he had been in his 20s wearing that shirt, he would’ve gotten looks of pity. People would’ve muttered, “What a loser,” instead of, “Ha, that’s cute!” Or would they?

Turns out, living with your parents as an adult doesn’t get embarrassing until you’re at least 28, according to a survey by TD Ameritrade. The survey found that more than half of millennials moved back home after college, and one-third lived with their parents for more than two years. And guess what? Parents don’t seem to mind. The survey found that 82% of parents said they would welcome their children moving back home after college.

You might be thinking, “Of course I’d let my kids move back home.” But before you convert their bedroom that you turned into a home gym back into a bedroom, you should think twice before letting your kids move in with you after they graduate from college. At the least, you should lay some ground rules. Here’s why.

You’re Not Really Helping Your Kids Out Financially

It might feel like you’re doing your kids a favor by letting them move back home after college – especially if they have student loan debt. But if you’re allowing them to stay rent-free and helping pay their bills, you could be hurting them in the long run. What incentive do they have to figure out how to survive financially on their own if you’re allowing them to rely on you?

Before you write me off as the meanest mom ever because I’m telling you not to let your kids move back home, I want you to know this. I love my three kids more than anything. Because I love them, I want them to succeed as adults. To do that, I’ve been trying to teach them how to be self-reliant.

Of course, my kids rely on me now for support because they’re young. But by the time they graduate from college, my children should be capable of supporting themselves. If they come knocking on my door asking to move back in and get help paying their bills and my husband and I say yes, they won’t have any reason to become financially independent.

Before you say, “My kids need my help because of all the student loan debt they have,” think back to what financial obstacles you had to overcome once upon a time. I graduated with student loan debt, had a relatively low starting income and lived in an expensive big city. My parents chipped in once when I couldn’t afford to get my wisdom teeth removed, but, for the most part, I was on my own. It forced me to learn how to make ends meet by getting a second job and sticking to a budget.

Rather than allow your kids to rely on you by letting them move back home and giving them financial support, teach them to become financially independent. Ideally, these lessons should start when your kids are young. But it’s not too late as they’re graduating from college or heading out into the real world to show them how calculate their monthly expenses and make sure they have enough coming in to cover those expenses first before spending on nonessential items and activities. Warn them about the dangers of debt. And encourage them to save by having contributions to a retirement account and rainy day fund automatically deducted from their paychecks or transferred from checking account to a savings account each month.

You could give your kids a book such as “Broke Millennial” by Erin Lowry, “Budgeting 101” by Michele Cagan or “The Automatic Millionaire” by David Bach to help them learn the basics of personal finance.  You could help them make job contacts to jump-start their career.  There’s a lot you can do that will help them out more financially in the long run than giving them handouts.

You Could Hurt Your Finances

Not only could you be hurting your kids’ ability to become financially independent by supporting them, you could be hurting your own finances.  A study by Merrill Lynch and Age Wave found that parents are providing $500 billion in support every year to their 18- to 34-year-old adult children. That’s twice as much as they’re contributing to their retirement accounts – which means parents are shortchanging their future to support their adult children.

Yes, your children might have student loan debt. But you probably have debt, too. If you let your kids move back home so they can have more money to pay off their student loan debt, chances are you’ll give them more than a free place to stay. You might pay for their food. You might chip in to help pay their cell phone bill. You might even help them make those student loan payments. That means there will be less money left over in your budget to pay down your debt and build your retirement savings.

You might think that helping your kids out is giving them a head start financially. However, you’re not doing them any favors if you’re sacrificing your financial well-being to “help” your kids. If you don’t save enough for retirement, for health care and for long-term care, you could be dependent on your kids for support as you age. And that could wreck their finances.

How to Protect Your Finances — and Your Kids’ Finances

If you’ve already let your kids move back home or are considering it, you should set some boundaries to protect your finances and to help your kids become financially independent. For example, you could tell your kids that they can live at home for only a certain period of time or require them to pay rent.  You could ask them to help pay for groceries and household bills. You also could tell them to chip in with household chores.

If your children want financial assistance rather than a place to live, consider limiting it to expenses that will put them on the path to financial independence. For example, you might agree to help cover education costs, career training or a move to another city for a job.

The key is to decide what level of support you’re willing to provide before you start giving your children any assistance. Then help them create a plan for their financial independence to truly help get off on the right foot.

 

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Cameron Huddleston

I am an award-winning journalist with 15 years of experience writing about personal finance. My work has appeared in the nation’s premier personal finance publication and website, Kiplinger’s Personal Finance magazine and Kiplinger.com, as well as Yahoo!, MSN, AOL Daily Finance, Huffington Post and other online and print publications.

About Cameron