It’s been nearly two years since we spent our last stint living with extended family members. Upon our return to the Midwest from the West Coast, we spent several months at my wife’s parents’ home while we looked for a place of our own. During this time, we began to realize some of the financial advantages of multi-generational living. And while there can certainly be downsides to the situation, it doesn’t have to be as bad as some opponents of the situation make it out to be. Remember, not so long ago it was quite common to find three or even four generations of a family living under one roof.
A rent or mortgage payment may be the largest bill most of us pay on a regular basis. And a multi-generation living situation can help alleviate some of the strain this bill puts upon occupants.
In our case, being able to move from a $1,750 a month mortgage/property tax/insurance bill into a parent’s home who lived mortgage free meant that not only could we chip in for things like food and utilities (thereby helping the parents financially), but live mortgage free, which was a huge savings for us.
According to the babysitting rates calculator at Care.com, the going rate for sitters in our area (and for two children) is $11 an hour. However, living in a multi-generational home can make for significant savings on the childcare front.
While I work from home, thereby saving us the $12,000 to $13,000 annual per child cost of daycare in our area, even that $11/hr babysitting rate can add up quickly. Going out for a night on the town twice a month for 4 hours each time could mean $88 a month in babysitting fees. However, having the grandparents happily available to volunteer for such duties, could add up to over $1,000 a year in savings.
Repairs, maintenance, household duties, and more
Then of course, there are all the other savings that come along with multi-generational living. When we lived in our previous home, repair and maintenance costs averaged right around $2,500 annually.
This was a cost that disappeared when we moved in with parents. However, some of the parental home maintenance costs disappeared as well with our arrival. Lawn maintenance expenses, the cost of upkeep projects like painting, cleaning, and minor repairs also disappeared as well since the younger generation (my wife and I) were handling them.
So it’s easy to see how multi-generational living can have its financial advantages. While it might not be a perfect world in other ways, such a living situation can certainly save money for both sides.
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The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.