The Return on Investment When Millennials Live at Home


A recent article by Kelli Grant at CNBC considers the millennial line at the Bank of Mom and Dad and concludes that “subsidizing your adult children's living expenses could be a really terrible financial decision – or a great one, depending on the arrangement.” For most American families, however, having your adult kids live at home seems to be working out very well. One reason for success is that “give and take” isn’t always identical in substance. As long as the giver and the taker consider the exchange to be comparable, the situation works out. Is it possible to quantify the financial consequences of your adult child’s return to the family home and confirm its monetary value?


Return on investment (ROI) is a financial term that Investopedia defines as “a performance measure used to evaluate the efficiency of an investment.” In other words, it tells you if you did well or poorly with the money you invested. We can try to estimate an ROI for having an adult child live at home. Let’s assume your adult child lives at home with you for a year. Your rent and utilities stay the same. Your food bill goes up – let’s estimate $300/month extra. You cover the child’s health insurance on your employer’s plan ($300), a cell phone as part of your plan ($50), auto insurance on your account ($70), and extra gas for the car ($100). We’ll throw in football Redzone ($50 for the season), one cell phone data overage ($20), and an airline ticket to see a cousin in Wisconsin ($300). Add another $3,000 to pad the estimate and that’s $13,810 for the year.


What’s the ROI of having your adult child live at home?


Companionship

I’m a huge fan of Agatha Christie’s mystery novels, and in many of them, a wealthy older woman will have “a paid companion” to hang out with her...until one of them gets murdered off to move the story along. I haven’t seen “Companion” on any job boards, but the pleasure of having another person you like to spend time with can’t be underestimated. Many boomer parents and millennial kids like each other enough to use the term “best friends.” That sounds like a perfect companion to me! What if you paid a home health aide to come and watch TV or play cards with you? At $10/hour for ten hours a week, 50 weeks a year, that’s $5,000.


Meal Preparation

If one of your millennial children lives with you for a while, get ready to go on a culinary journey. Our young people have much more adventurous tastes than we do, and they’re happy to Google, Pinterest, and Snapchat the meals they are preparing for you. The only thing I really didn’t miss when our daughter moved out was the jalapenos that were featured in pretty much everything she cooked. How much would it cost to have a chef come in and prepare dinner for you three times a week? At $15/hour for 3 hour