The Family Plan: Managing Life in a Multigenerational Household

multi-generationalEight years ago, Charlie McGloughlin and his wife, Amy, extended a helping hand to his parents. His dad was in poor health, and his disability had reduced the couple's income. A house of their own had become too much for the elder McGloughlins to handle.

So Charlie and Amy bought a five-bedroom home in Philadelphia -- big enough to accommodate themselves, their two children, his parents, and a guest. Charlie's dad died shortly thereafter, but his mother, Judy, has since moved in.

As it turned out, the consolidation of the households was a win for everyone.

"We put it out there that we would take care of them, but with this economy, I'm not sure we would manage without her," says Amy of her mother-in-law. Judy's contribution to the mortgage and groceries makes a huge difference -- especially because of Amy's student loan debt. And since Amy works full-time as a pastor, Judy's help with the grandkids is invaluable. "When I was in school she took on a lot of the child care responsibilities," says Amy. "She picks up the slack."

the McGloughlins

The number of multigenerational households in this country is growing fast. As of the end of 2009, 51.4 million Americans lived in a home with three or more generations under one roof; that's one in six of us. And it's nearly 5 million more than the 46.5 million Americans in such households in 2007. Put another way, it's an increase of 10.5%, according to statistics from the newly released Family Matters: Multigenerational Families in a Volatile Economy from Generations United.

It's a trend that's unlikely to reverse anytime soon, even if the U.S. eventually experiences a robust recovery. The reasons are varied, but among them are the 78 million aging baby boomers who will increasingly need assistance, and the country's growing Hispanic and Asian populations, which have cultural traditions of living in extended families.

Easing Financial Burdens

Traditions aside, for many, the reason to set up house with relatives is economic. According to a Generations United survey, 66% of people in multigenerational households cited the economy as a factor, while 21% said it was the only factor. Others attributed the move to a change in job status or underemployment (40%), the burden of health care costs (20%), or a foreclosure or other housing crisis (14%).

And while nobody would say living in a blended household is without challenges, it does ease financial burdens. More than 70% of those surveyed said that going multigenerational improved the financial situation of at least one family member, and half said said that living together made it possible for a family member to continue school or enroll in job training. And then there are the emotional benefits: a whopping 82% agreed that family bonds strengthened despite the stresses.

"If anything good has come out of the recession, it's the lesson that we need each other," points out Donna Butts, executive director of Generations United, which promotes intergenerational collaboration. "Families coming together is not a shameful thing, it's the roots of our country."

Heading Off Potential Problems

Family finances are complicated enough. Add elderly relatives or adult children with kids of their own into the mix and things can easily go off the rails. Children may need help paying bills; grandparents may need help with medical expenses. Grocery and utility bills go up. You might even have to remodel. If you're not prepared, you can end up taking on debt, postponing life events, maybe even delaying retirement.

So if you're already living in a multigenerational household, or thinking about it, what steps can you take to better manage your money -- and your sanity?

For starters, be clear about the reasons for the move. Did the adult couple with children move in to take care of aging parents -- or so that the parents could help take care of the grandkids? Did Junior come home after college because he didn't feel like working or to help pay off student loan debt? The clearer you are up front about motivations, the easier it is to anticipate--and head off--potential conflicts.

Pay attention to emotions. Living together can reveal previously buried fault lines in a relationship. If there's a history of conflict between parent and child, the adult child may worry their newly dependent position will be used against them, says Joshua Coleman, Ph.D., psychologist and co-chair of the nonprofit Council on Contemporary Families. Grown children may feel guilt or shame at having to depend on Mom and Dad again. Parents may worry about putting a strain on the marriage of the adult child they've moved in with.

To reduce stress, any family member who moves in with relatives ought to make a financial contribution to the household if at all possible, Coleman suggests, or find other, non-monetary ways to help out. "Not all family members have the same resources," he says.

Making a Family Plan -- And Sticking to It

Before anybody even touches a moving box, make sure you've tackled the tough questions. Who pays for what? How long is the arrangement going to last? How much is it going to cost?

How do you think you would do in a multigenerational household?
I would be fine, my family gets along great.1 (20.0%)
I have never thought about this.1 (20.0%)
I don't think we would last a day.1 (20.0%)
I am living in a multigenerational household and we are loving it.1 (20.0%)
I am living in a multigenerational household and we are miserable.1 (20.0%)

Have a discussion about roles and tasks. "The child returning from college may want everything to be like it was in high school, where the parent paid for everything," warns Daniel Keady, director of financial planning at TIAA-CREF Financial Services. "Establish that the level of financial support is not the same."

In cases when health issues have driven the consolidation of households, create a care-giving budget. Make a list of estimated expenses and determine how much the aging parent, the caregiver, and/or siblings can contribute, says the NEFE's Golden. Encourage parents to share their financial records. Caregivers need their charges' financial account information, the names and contact information of their advisers, and the locations of key documents such as wills.

Brainstorm about what each person thinks is the ideal breakdown on responsibilities. Be clear about roles and boundaries -- who cooks, who cleans, who buys what? What is the standard for looking for a job? What are the expectations?

Talk early and often. It may seem awkward at first, but try holding family meetings, formally or informally."The homeowner has the trump card, the last word, but consensus is better for everyone," says Butts -- though there are exceptions. "If the homeowner is about to lose their home and needs the relative's income, they don't quite have the final say."

Good Times, Hard Times, Family Times

For the Spencer family (pictured below), it's the logistics that are most challenging. Josephine Merrick, 89, initially resisted leaving the North Carolina home her husband built when they first married. But Merrick, a diabetic, wasn't eating properly. A few times she lost consciousness and was found on the floor of her home.

So three years ago, she agreed to move to the 5-bedroom house in Virginia Beach, Va., where she now lives with her daughter and son-in-law, several adult grandchildren -- granddaughter Que Spencer lives there when she's not away at college -- and soon, a great-grandchild. But Merrick has kept her North Carolina doctors, some of whom are three hours away. "It's been tough for my parents, who work full time, to take off work to get her to doctors' appointments. She is never going to switch," says Que.

Que Spencer and family

It's been great having her grandmother around though, says Que -- especially her cooking. "We all pitch in, make sure she has her medicines and help her get around. We're a close-knit family. We've always taken in family and friends over the years."

The New Normal

Multigenerational households like the McGloughlins and the Spencers may be becoming the new normal. "America is used to being the No. 1 economy in the world, but we're seeing a re-emergence of global competition," says John Hauserman, a certified financial planner with RetirementQuest Wealth Management. "Living together is here to stay. This is not the America with its picket fences, where you put mom and dad in a nursing home."

Generations United suggests that more should be done to meet the needs of multigenerational households. Among their many recommendations, they call on banks and other mortgage lenders to adjust requirements for these borrowers, and for corporations to offer more generous paid-leave options.

Amy McGloughlin says she and Charlie have learned a great deal from the experience. "The old thinking was that everything belonged to one person. But our house is for more than us. All we have is to use and share. It doesn't make sense to hold on to things so tight."

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Fed res dollar printing has increased to keep up with US treasury's need for them as debt buyer of last resort. Euro is doing same for their debt but doesn't hold the luxury as world's res currency. Fed exports it's inflation to the world euro can't & WILL hypor inflate to ZERO. Europ will run to the dollar as others trade for gld/slvr. Even with small demand increase gld/slvr price rise outside the fed's ability to keep suprpressed & dollar will start its final fall, world WILL panic & gld/slvr will BE only reserve currency. World fiat monotary system is collapsing & we face deep depression. Got Gold? China & India does, why's that you figure?

December 25 2011 at 4:57 PM Report abuse +1 rate up rate down Reply
LEE Resolution

bad idea all the way around ( unless the circumstances are dire, in which case it's still not good).

December 25 2011 at 10:04 AM Report abuse -1 rate up rate down Reply
1 reply to LEE Resolution's comment

still an idio t with an over sized ego

December 25 2011 at 4:58 PM Report abuse +1 rate up rate down Reply

has anyone heard of the waltons,remember john boy.this nothing new.just coming back into play.

December 25 2011 at 10:04 AM Report abuse +1 rate up rate down Reply
2 replies to background's comment
LEE Resolution

times were different then.

December 25 2011 at 10:43 AM Report abuse -1 rate up rate down Reply
1 reply to LEE Resolution's comment

children where different then

December 26 2011 at 11:15 AM Report abuse +1 rate up rate down

should have never ended, marginal income per family could have been twice what it was the last 50 years making capitalism much more productive and profitable for all. More invested means increase in average returns. Self centered babby boomers couldn't see past there own I want the govt (tax payers) to pay for my parents so they don't have to hear their parents teach them truths like God, integrity, loyalty. Boomers have one value, me me me me me me me me me

December 26 2011 at 11:13 AM Report abuse +1 rate up rate down Reply

LOL-those from the traditional immigrant experience still wonder where the hell did everybody sleep as dignity and basics were maintained--and everyone was jammed into a 2 bedroom at the most....and of course the parents had the "big" bedroom,girls the other bedroom and your brothers and uncles the living room and wherever--LOL !!!!
we don't know of anyone going through this in reverse as in moving back home or taking in their frail parents,usually a family member goes to stay with them so they have their familiar setting and things around them at this point in life.-=-we see it differently as they sacrificed massively for their families.
That's also WHY we dispute all this homeless_ness bs esp among certain "ethnics" as THE FAMILY is and always will be first and foremost--there is a distinct reason WHY they are out there and it's never due to any lack of space as you always will make room even if the younger ones are sleeping on the couch/fold up /roll away beds etc....

December 25 2011 at 10:03 AM Report abuse -1 rate up rate down Reply
Pam Miller

The idea has its pros and cons. It would force more of the old family continuity. People could continue to more easily afford their current lifestyle (new car, toys etc.). But it would have to be VERY well planned. People are not going to agree on many things (what color the new carpet should be, the landscape, what the thermostat should be set at..etc.) I'd buy a home (or remodel) to have a central common area, but have bedrooms etc set up with private entrances from the outside, to try to give each group of adults a sense of having their OWN space to come and go from. The hardest part would be the parent/grandparent clash, over the children. We have all tried to change things with our own children, that we didn't like that our parents did with us. Under the same roof, that will become an issue not easily addressed. Really sad that kids today won't be able to look forward to their OWN homes. Or the thought of knowing you HAVE to have "X" amount of children, to continue to provide for your group in the following generations.

December 25 2011 at 9:43 AM Report abuse rate up rate down Reply

I grew up in a multigenerational household and it wasn't because of economics - it was quite common during WW2 when husbands were off fighting and their wives and kids moved back in with the parents. Now, because of economics, one of my granddaughters, her husband, and her baby have moved back in with her parents - my youngest daughter. It is said that whatever was old is new again! The reasons may be different, but the fact remains that multigenerational households are becoming the norm again!

December 24 2011 at 8:13 PM Report abuse rate up rate down Reply

I think the whole idea of Santa Clause is really for kids. We loose sight of the fact that Christmas if about Christ. We should not be at the malls buying stuff but out helping those people who are in need.

December 24 2011 at 7:35 PM Report abuse rate up rate down Reply

I think that the idea of Santa Clause is silly. It's really for kids. We loose site of the real meaning of Christmas the celebration of Christ. People should not be at the mall buying "stuff". They should be out giving to those who need it.

December 24 2011 at 7:32 PM Report abuse -1 rate up rate down Reply

Tell me what doesn't add up here.....the stock market reaches all time highs, unemployment reaches all time highs, foreclosure and bankruptries reach all time highs. Is there something wrong with this picture?????????

December 24 2011 at 4:44 PM Report abuse +2 rate up rate down Reply
5 replies to thefosz's comment

This has been mainly the three decade long economic plunge creating the need of families and others to cling together for survival.

December 24 2011 at 3:17 PM Report abuse +2 rate up rate down Reply