Financial Resource Center

Money Management

Generations Live Together to Save Costs, Gain Quality of Life

by Darla Dernovsek / August 30th, 2010

Lori and Steve built their new Idaho home with a "mother-in-law suite" for Lisa's mother, Brenda. Lisa and Brenda work different shifts at the same hospital, so there's usually an adult around to keep an eye on the family's three teenagers. And even when Brenda works the second shift, she returns to the reassuring noise and activity of a lively family instead of to an empty house. John's grandfather was undergoing chemotherapy and radiation treatments for cancer while struggling to operate a small business and maintain the family farm. When John lost his job, he moved into the guest bedroom in his grandparents' Minnesota home, found a new job, and spent his spare time helping with farm and business chores. Three months later, John moved into a small rental house owned by his grandparents less than a mile away. His grandparents describe John as a "godsend." Multiple generations are coming together to share the demands of everyday living in neighborhoods across the country. Along the way, they're learning that when members of different generations spend time together, it can be good for both their quality of life and their wallets.

Together again

In their book "Together Again: A Creative Guide to Successful Multigenerational Living," Sharon Graham Niederhaus and John L. Graham examine the shift toward sharing living arrangements among multiple generations. Graham, professor of business at the University of California, Irvine, says single-family homes occupied by "nuclear families" consisting of two parents and two children have been a historical break from the longstanding tradition of multigenerational living.
Critics of "boomerang children" overlook the blessings for parents.
The switch to nuclear households began in 1940, when more than 60% of elderly widows lived with their adult children. That steadily declined to less than 20% in 1990 before rising again. Nationwide, the number of Americans living in multigenerational households increased from 12% in 1980 to more than 16% in 2008, according to a Pew Research Center report based on U.S. Census figures. The number is probably higher, since the Census count omits individuals who live in close proximity but not under the same roof.

A return to interdependence

Economic pressures, immigration from countries with a tradition of multigenerational living, and a desire for stronger family ties all contribute to the trend. "We're headed back to interdependence within the extended family," Graham says. For example, the White House houses three generations of President Barack and Michelle Obama's family, from their daughters to "first mother-in-law" Marian Robinson. "Together Again" examines a variety of living arrangements that bring members of different generations together on a day-to-day basis. That might mean sharing the same home, renting apartments in the same building, or living nearby with frequent contact, such as shared meals or shared child care.
Sharing the same roof can offer significant savings.

Important gains

Sharing the same roof can offer significant savings. Graham's adult daughter recently moved back to the family's California home and will drive one of her parents' two cars. Living in a high-priced real estate market, she will save $2,000 a month in rent alone, plus the cost of a car and insurance. In exchange, her parents will save $50 a day on dog sitting when they travel, plus have help with household chores. A household with young children who require child care or older adults who require help with daily chores or medical needs might save even more. "This trade of services, especially in the child-care area, is a really big consideration," Graham says. "It's not just consolidating the real estate, it's also having folks available to help each other out." Ongoing contact also creates irreplaceable family ties, especially among grandparents and grandchildren.

Ground rules

Some families may be unprepared to live in close proximity. Graham suggests traveling together to see if family members or friends can share the same space, day after day. "Some relatives drive us crazy," Graham says. Communication and compromise are essential to avoid conflict. Yet even compatible families can experience difficulties.
Monthly meetings can create guidelines to deal with minor issues.
"The key battleground is the kitchen," Graham says. Giving each family unit its own kitchen—even if it's very small—helps prevent conflict. If separate kitchens are not feasible, clear ground rules are a necessity.

Monthly meetings can create guidelines to deal with minor issues, such as crumbs left on the kitchen counter or wet laundry left in the washing machine. Hold meetings regularly for at least the first four to six months to assure getting off to a good start.

Adult sibling issues

When elderly parents move in with an adult child, siblings may fear losing their inheritance. Graham advises holding a family meeting in a neutral setting to inform all siblings of financial arrangements, including the parent's will. "Everybody needs to come to the table as a responsible adult where nobody owes anybody anything," Graham says. If necessary, a lawyer can draft an agreement that details financial aspects of living arrangements.

The next generation

Young adults who live with their parents are sometimes ridiculed. But Graham believes critics of these "boomerang children" overlook the blessings for parents who want to share a home with multiple generations. According to Graham, surveys show that parents miss their adult children more as they spend more years in an "empty nest." "Human beings are designed to live in extended family groups," Graham says. "That's when we're happiest."
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