Jackie Woods, a mother from Western Sydney/Gadigal Country, is among many Australian parents whose adult children have yet to leave home. With the rising cost of living, her two sons, aged 20 and 23, remain under her roof. However, Woods recently decided to charge her eldest son board after he secured his first full-time job, setting the amount at $200 a week. “It’s a good deal for him,” she explains, noting the need for a fair arrangement.
This decision reflects a growing trend among parents to charge rent or board to adult children, a move that can benefit both parties. Experts suggest that such arrangements teach financial responsibility and independence, while also easing the financial burden on parents.
The Case for Charging Board
Board is typically a payment for accommodation that includes meals, and it serves as a tool for teaching financial independence. Parenting expert Justin Coulson from Brisbane/Meanjin advocates for this approach, describing it as a way to help “adultescents” transition into adulthood. “They’re still living at home, relying on our support,” Dr. Coulson notes. He emphasizes the importance of clear communication and firm boundaries.
Financial adviser Kate McCallum from Melbourne/Naarm sees shared living as a learning opportunity. “It’s about understanding what it takes to be financially independent, but with training wheels,” she says. McCallum advises parents to involve their children in budgeting exercises to foster financial literacy.
Determining a Fair Contribution
Experts recommend negotiating arrangements that are fair and suitable for both parents and children. McCallum suggests a “bottom-up cost build” of household expenses, dividing the total by the number of adults in the home. For example, if monthly costs are $2,500 for a household of five, each person would contribute $500.
For adult children working full-time, this method provides a clear and equitable way to share expenses. However, McCallum cautions that simply paying rent doesn’t improve financial literacy; understanding the household budget does.
Board for Students
For students working part-time, a percentage-based model may be more appropriate. McCallum proposes charging 20% of their monthly income or a similar percentage of local market rent. “The idea is to make the amount reasonable, not punitive,” she explains.
“We charge them 10% of their earnings,” Dr. Coulson shares about his own children. “If they earn $46, they give us $4.60.” This approach sets the expectation that “nothing is free,” he adds.
Alternatives to Charging Board
Not all parents wish to charge their children rent. Some prefer to support their children through education or early career stages without financial contributions. Dr. Coulson suggests setting “ground rules” in such cases, like household chores or meal preparation.
Experts recommend formalizing agreements in writing, as behavioral finance research indicates that signed commitments are more likely to be honored. “Include chores and participation in household activities,” McCallum advises.
The Pros and Cons of Living at Home
Dr. Lixia Qu, a senior research fellow at the Australian Institute of Family Studies, highlights both benefits and challenges of young adults living with parents. While it can strengthen family bonds and provide support, differing lifestyles can lead to tension. “Mutual respect and clear expectations are key,” Dr. Qu emphasizes.
This article provides general information only. Readers should seek independent professional advice tailored to their specific circumstances.
