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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: carloco on August 21, 2014, 06:55:42 PM

Title: Should a family memeber pay rent?
Post by: carloco on August 21, 2014, 06:55:42 PM
I have been wrestling with a situation in my home.  My mother moved back to the USA in 2003 and started living with us in our apartment.  Since we already had all the expenses covered and she was searching for a job I never even considered asking her to contribute to the expenses.  Eventually, She was employed by a school district making over 60K.  A year later, we bought a house with space for her to have a "semi-apartment".  She "gave" us 10K as part of our down payment.  Currently, she pays for the cable/telephone/internet because she is the one who wanted cable TV, something we didn't have before she moved in.   I feel an obligation to take care of her, but on the other hand she is saving very little of her income.  Furthermore, I have very little to afford to remodel the house.  I have asked her that just saving a little we could improve her area of the house.  It needs flooring and a bathroom remodel.  On  one hand , it pains me to see her not save more for her retirement and now she may be helping a sister with her mortgage.  I often wonder what she buys every month...  I know she has a car payment and a few small bills.  But other than that who knows??,  Family relations are so complicated.....
Title: Re: Should a family memeber pay rent?
Post by: darkadams00 on August 21, 2014, 07:37:56 PM
Our house rule--if you're not in school, you're paying 100% of your fair share. Kids in school are either too young to earn more than their share of discretionary spending/personal wants or they're focusing on college studies/expenses, i.e. studying hard to earn high grades for internships/scholarships/admission to the next level and/or earning to avoid student debt. Once the education cycle is over, it's time to start taking responsibility. We'll help when we feel it's absolutely necessary and will think nothing of it afterwards, but you better know that such a financial subsidy comes after much deliberation and with a cost--expectations, explanations, and accountability.

Parents who need to move back in with the children for non-medical reasons are likely suffering the consequences of a lifetime of bad choices, similar to a financial heart attack. I would stipulate in no uncertain terms that everyone contributes personally and financially at a level that is approximately proportional to that person's share in the expenses. In previous generations, the parents that moved in with children had paid-off property to sell and were usually beginning to slip in the maintenance of their home and possibly their health. I will always respect adult kids who take care of their ailing parents. I wouldn't feel nearly as responsible or obligated when the parent is still not retired, in good health, and earning enough that you're raising eyebrows at her monthly expenditures.

...and this doesn't even include what a spouse would say about such an in-law.
Title: Re: Should a family memeber pay rent?
Post by: carloco on August 21, 2014, 09:09:56 PM
Thanks for the reply Adams. 
Title: Re: Should a family memeber pay rent?
Post by: resy on August 21, 2014, 11:19:32 PM
What was the agreement of the 10k? Was it for future rent or a gift? I agree that if a family member isnt in hardship then they need to be responsible and fair...but be prepared to hear about that 10k then because, well, its also fair it doesn't get considered.
Maybe set up a rent agreeement and have the 10k cover x amount of time starting from the time it was given? Or repay it as a loan with small interest and charge rent seperately?
Good luck, I know it must be a difficult situation being your mother
Title: Re: Should a family memeber pay rent?
Post by: Matte on August 22, 2014, 08:44:01 AM
Yes! Family needs to pay their fair share.  I give my brother pays about 150 a month less then the going rate.  I know he hoped for a better deal since he doesn't work a steady job and only makes about 30k a year.  He still manages to buy new stuff to clutter it more every week so I know he's not in hardship.
Title: Re: Should a family memeber pay rent?
Post by: Fuyu on August 22, 2014, 09:06:41 AM
Since my parents paid for all of my living expense from birth to 21, if they need a place to stay, I wouldn't charge them rent. If it was a sibling and they had a job, I would expect them to pay for half of the utilities and internet, but that's it.
Title: Re: Should a family memeber pay rent?
Post by: darkadams00 on August 22, 2014, 10:31:42 AM
True, if the parent "needs" a place to stay. The OP's parent is healthy, working, and earning ~$60K (possibly more than the OP since he doesn't have money to repair the house)--sounds like this is not a need, hence the OP's apparent frustration.
Title: Re: Should a family memeber pay rent?
Post by: meyla on August 22, 2014, 11:00:50 AM
I think family members should absolutely pay rent if they are capable, but I also think that family members deserve special treatment. My sister lost her job and moved in with me. I had a bedroom and bathroom in a private area of the house that was unused so it was no problem. We discussed it openly and agreed that she is... not so good at finances, so she has a flat rate that she can budget for each month easily. This flat rate is probably a little in her favor, but I don't mind it at all since it's income I wouldn't have otherwise.

I think with family you should be able to have an open conversation about what is fair and reasonable without anyone getting hurt feelings. I would also recommend getting it written on paper - for everyone's sake.
Title: Re: Should a family memeber pay rent?
Post by: Fuyu on August 22, 2014, 11:18:54 AM
Opps, sorry bad word choice on my part. I meant if they wanted a place to stay regardless of their financial situation, I wouldn't expect them to give me any money.

Is remodeling the floors and bathroom the same thing as repairing a house? Remodeling seems more like changing things to suit her aesthetic taste and repairing would be more ensuring the structural integrity of the building.
Title: Re: Should a family memeber pay rent?
Post by: OSUBearCub on August 22, 2014, 11:29:15 AM
This is a tricky one because it's a parent - they did fund your entire life until you were out on your own.  It's nice that she's paying the cable bundle bill and this might be your edge.  I'd call a family meeting and remind her how great it is that she's living with you but open up the topic of your immediate and long-range plans for the renovations.  Then, I might suggest she take on an additional bill or two - electric or gas, whatever would have the best financial impact.  She may even be pleased that she's able to help you achieve your goals.
Title: Re: Should a family memeber pay rent?
Post by: Dezrah on August 22, 2014, 12:54:18 PM
I'm getting the vibe that she feels as uncertain as you.  She gave you a $10k gift probably because she wants to do right by you.  My suggestion is that you guys should sit down and talk about until you have a more formal agreement in place.  Perhaps she will pay you rent and you promise to implement valuable upgrades in her space.  Or maybe you agree that her gift is actually pre-payment on her share of the rent.  Or maybe you just flat out tell her that you're not interested in rent but when you retire in X years, you will need her to find an alternative because you will at that point be relying on passive income.
Whatever the case, I bet that once you set up the boundaries and rules, everyone will feel better with the situation the uncertainty about how the other party feels will be gone.