7 Tips to Help You Decide How Much Rent to Charge Your Kids ...

Are you wondering how much rent to charge your kids once they start working? Some parents are reluctant to charge their adult children any rent at all, and some kids feel that it's their parents' obligation to keep providing them with free accommodation even once they start working. But if you don't charge them a reasonable amount, you won't teach them some valuable life lessons. So how much should they pay? Here are some tips to help you decide how much rent to charge your kids …

1 What do They Earn?

A good place to start when working out how much rent to charge your kids is by looking at their take-home pay. If they don't earn very much, it's probably not fair to charge them market rent. Many people choose instead to charge their offspring a certain percentage of their take-home pay, which can be a good option if they're only working part-time.

2 Extra Costs

You should also take into account the money that your child is costing you, such as energy, water and food, especially if they have the usual youthful tendencies to leave lights on and take long showers. Bills are not cheap these days! Also consider if you'll be doing their laundry and cooking their meals.

3 Savings Account?

Some parents charge their children rent in order to teach them fiscal responsibility, but secretly stash the money in a savings account. Their idea is to later gift the money for a house deposit. If you decide to do this, it would certainly be a lovely surprise for your children (but do make sure that they don't blow the cash on something else!).

4 Frivolous Spending

When they get their first job, young people often feel rich - and start spending madly. As far as they are concerned, it's all fun money. If your child is the type to do this, you should make sure that you get your cut first; you could take a percentage so that they still have enough for frivolous spending but not at your expense.

5 Market Rent

You probably won't want to charge your kids the market rent in your area, but it can be a good starting point to work out how much you want to charge them. You could choose to charge them a certain percentage of the typical rents, or 'discount' it by a certain amount.

6 What is Included

Also consider what will be included in the rent and what they will be using. Will they be spending a lot of time out of the house? Will they cook their own meals and buy their own food? And does their girl/boyfriend stay over a lot?

7 Do You Need the Money

You may want to help support your adult children financially, but economics may dictate otherwise. If you don't have the income to keep subsidising them, then it's fair to charge a reasonable rent, depending on how much they earn.

If your kids complain that you're charging too much, simply check the prices of similar rooms in shared houses - which are bound to be a lot higher - and point out that they're free to move out if they prefer. They will soon realise that you're offering a pretty good deal! What did your parents charge you when you started working?

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Comments

Claudette Hi, When i started my first job i used to pay my mum half of my earnings, and as she still looked after me it felt the natural and respectful thing to do. Now my son who is 27, still lives with me works and earns more than i do, he pays me a fifth of his wage as living costs, and hes saving money for his own place. He is happy to do so, he offers to give me more but i refuse as i want him to save most of his money. He understands how much everything costs, and he doesnt want to be thought of as a freeloader, but he knows i would never think of him that way. He is learning to be responsible and adult, and i am proud of him.
Steve Alysha commented, "This is horrible. If you don't want to pay for your kids don't have any!" This article was focussed on how much working grown children should contribute towards their costs when living in the family home. The comment 'If you don't want to pay for your kids don't have any' is similar to kids also saying "I never asked to be born!" Both of those comments are feeble arguments. It was taken for granted in my family that once adult and working you would contribute to the family housekeeping budget. Ultimately without fiscual responsibiity your adult child is less prepared for the future.
Petra Why are we calling them kids when they are young adults to be prepared for life. They are young adults and the sooner we show them how to budget the better. They need to be prepared for the real world and understand that aspect of life. We are setting a standard for their future and help them make good decisions with their finances. I made 800 Dollars at 18 and gave my grandpa 300 and for me that was completely normal. We are to make good stewards out of the children by the Grace of God.
Billy I charge my son who makes about 30% more than I do $250 per month. Mostly because I don't want to become dependent on his money and I want him to financially be able to LEAVE.
Harry And he’s 25 years old with a masters degree.
Harry Also consider your own household budget. Ours is $6000 monthly. Asking him to pay $1000 is more than fair, especially considering he consumes $800 in food.
BethE We are a large family with one income, I earn a little helping out a friend also. My high schoolers that are working only pay for the extras they want, i.e. clothes, snacks, movies, eating out with friends, gas for outings. We provide what they need. They may not want what is for dinner that day but it's there. We provide things that they want as we can afford it. I'm frustrated that an adult offspring is working full time, does little around the home, and doesn't contribute financially. If they were going to school I'd feel a bit differently about it. They've planned to go to school but put it off a few times. How long do I wait before figuring that it's not happening?
Heike When I was 14 years old my Dad said I'm going to charge you $40 a week (1975) when you graduate high school. I thought why the hell does he need 160 a month from me , no way! My out marriage. Not the answer. What important is teaching a good work ethic ,and further education which my parents didn't . But as a former single Mom I've taught my daughters. Who are self reliant and never as for a thing!
Karina Hello
Sherri I personally like the idea of saving the rent money into a savings account for their son/daughter. I think that it is reasonable to expect and ask working adults to help out with rent if the parent needs it. I have a son and would gladly support him until he is capable but once he is capable and starts helping out with rent and utilities without being asked I would certainly feel so proud. It really goes two ways :)
Isabella My boyfriend has always paid rent since he started working at 15; I think it's a curse and a blessing. I think his parents are weird for choosing to do that, but he's learned how to live and knows how to budget his money from the process. My folks had a go with me but $50 a week is nothing on preparing me to move out, and plus now I'm studying full time so don't bother anymore.
HannahG I think what this article is trying to say is 'how much should you charge you kids who are old enough to move out'. They are referring to kids that are at uni or old enough to move out but don't want to.
Neecey Geez people - it says in the introduction that it;'s for when the kids start working!
Jade If they are "kids" and not 18 years or older with a job, then why the hell are you charging them rent? You bought them into this world and it is your responsibility to take care of our children ... This article makes no sense
Alysha This is horrible. If you don't want to pay for your kids don't have any!
- Maggie @Alysha: "This is horrible. If you don't want to pay for your kids don't have any!" This is such backward thinking. When you have a child you DO pay for all their expenses from birth until they begin to earn a living and it is at this point that they must learn how to contribute to expenses. If we don't do this, kids are taught to be consumers, not contributors. Our goal is to help them to become responsible adults. This article is intended to be a guideline for those with kids who are earning. Personally, I did not charge my daughter rent even though she was earning well prior to leaving school. She recently turned 18 and we will now expect her to contribute. We could get $1000 if we rented out her room. We will ask her to contribute a fraction of this. Most likely around $300 for the first few months but this will go up incrementally until it is at a more market-related rate. It is important to teach fiscal responsibility. We also can't make it too comfortable for our kids to be at home or they will never leave. As tough as this sounds, this is an important life lesson.
Karina Hello