Color of Money Live: The ups and downs of multi-generational living

Oct 04, 2018

Send in your questions to Washington Post nationally syndicated personal finance columnist Michelle Singletary.

This week, Michelle was joined by Lisa M. Cini who is the author of Hive, a book guiding families in multi-generational households.

“Knowledge isn’t power. The right knowledge is power.”

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Read & share Michelle Singletary’s Color of Money Column on Wednesdays and Sundays: https://wapo.st/michelle-singletary

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Thank you so much for joining me today. I have a guest- Lisa Cini - who is here to talk about multigenerational living.  She's the author of "Hive." So ask away about who to liven with parents and grandparents. 

And as always love to here your Thursday Testimonies. 

Lisa, your book is very timely as we think about future options for our intellectually disabled son. He just turned 17. He'll get a HS diploma because school will push him through (long story), but job opportunities are grim given his behavioral, intellectual and mental health challenges. He is receiving transition support, though. We are thinking about options to share space with him vs. trying to find a group home situation. Building an accessory dwelling unit (ADU) is an option. Finding a way to partition a space for him within our home may be another possibility. How do people in multi-generational spaces deal with individuals with poor decision-making skills? How do you handle someone whose skills are impaired bringing someone home overnight, who may be sketchy?

Thank you for your question.  Boundaries need to be set from the beginning no different than in a marriage or roommate situation.  We had my grandmother 92 with Alzheimer's living with us and her decision-making skills got worse through the 4 years, but sometimes would be spot on which was more of a challenge.  Having separate but connected spaces and then "lock-down" times for the house helped. for example, at certain times all doors would be secure to aide everyone in the family to feel safe.  we also did cameras on the outside and then finally had to do some on the interior which helped tremendously.  Hope this all made sense. :)

I can't explain how happy I was to have paid off my student loans 15 years 'early'. I didn't have a huge loan amount (thank you academic scholarships), but it was such a pain to have to always factor that in, and it's a huge relief to be done with it. We now have an infant and have just set up a 529 plan. Any advice on what questions we should ask ourselves to make sure we're setting aside the right amount for our kid, so he's hopefully not saddled with enormous debt when it's time for school?

 

Read Michelle's column: How we sent our children to college debt-free

You don't have a "little" testimony. Paying off any debt -- all debt -- is MAJOR. Give yourself that credit. Lots of people hang on to their "little" student loans like it's a pet. They argue, "Well the interest rate is so low." 

Hogwash. Get that monkey off your back and live FREE.

To answer your question about the 529 plan read my column about how my husband and I are sending all three of our children to college debt-free because of our savings in 529 plans. In the column, I detail how we did it including calculating how much we needed to save every month. 

We are affordable housing developers with new projects currently active in several cities. We are interested in designing new types of housing that will accomodate multigenerational households, but we need input on the other types of issues that may arise. Financing structures, amenities offered, social/support services, & mental health issues must be considered, so how can we help? Tom E., Housing Opportunities Fund, Atlanta, GA

 

Read Michelle's column: Who’s living under your roof? Why a multigenerational household can strengthen your family finances and bonds.

Typically, multigenerational households do not have the support systems you are referring too such as support systems and mental health.  Can you further elaborate on why you feel this is needed.

Michelle, I'm asking for a friend -- really!! Somehow, a friend who can't afford it got sucked into buying a timeshare in Mexico. She desperately wants to get rid of it and has been approached by a company which sounds super shady to me. I've strongly, strongly advised staying away but she has no idea where else to turn to unload this thing. I've Googled around and found some rough ideas, but so much of it looks shady. I'm having a hard time figuring out who's legit and who's not. Do you have any guidance? And if readers out there are thinking of buying a timeshare, JUST DON'T!!

 

Read more: How to Get Rid of a Timeshare 

You are being a great friend. And I suspect as you do that the company is a sham. I've linked to a column by Liz Weston on NerdWallet that you should send to your friend. 

Any other timeshare owners with stories to tell? Advice?

I'm back! On Saturday, I called my insurance, but made it clear that I wanted to file the claim with the other company, and provided all the information for the other driver's insurance. I haven't heard anything back yet so I was debating doing a follow-up call either later today, or tomorrow. Also last Saturday, I had my car go into the shop for an oil change; I mentioned the accident so the mechanics would take a look for themselves. They didn't find any hidden damage but I am also considering having an adjuster look at it for another opinion. Sorry if my questions seem silly, I've never been in this situation before. Also, one person brought this up, but I live in MD.

Thanks for returning and for the update. No harm in calling the insurance company back for a status of the claim. No question is silly. Getting hit is a big deal. 

Ms. Singletary, I am under 18 and it is my understanding that you cannot create a legally binding will as a minor (I live in Virginia if that matters). How would my family know what to do if something happens? Like I would like my sister to have access to my college fund when she goes to college, would I tell her now, tell my parents now, write something down for them to see or none of the above? Thanks!

You are correct. But you can certainly and should tell your sister and your parents your desire for any money you have saved, etc. 

We are in the early stages of discussing whether my parents should move in with my family. My parents are in their early 60s, have some health issues, but are generally still active people. The potential upside is that living with us would allow them to spend a lot of time with my young son and to help with his care. They live across the country from us now. We are thinking about selling our home and getting a house with a basement apartment. Before we start thinking about actual logistics, what should be the starting point for a real and detailed conversation between my parents, me, and my husband? What should we discuss and get ironed out early on if this is going to work for everyone?

Great Question!  There are several things that should be discussed that I did and did not (and wished I had).  if you have siblings, you need to get them onboard first, otherwise they may feel you are taking advantage of your parents. We know that's not the case but it needs to be clear.  who is paying for what, who owns what, who gets to park in the garage, who gets to visit without ringing the doorbell, or stay the night?  where does everyone's stuff gets stored and who has to give up the most.   what are your expectations on help with your son.   what happens when their health goes with a stroke or dementia (god forbid).  do they feel second class going into the basement or will it be perceived this way.   my parents had their own suite upstairs with us but that had its own challenges. 

Are you aware of any families that have at least two generations in a household simply for the sake of being roommates and reducing their footprint? I ask because my husband and I have shared a home with our daughter and son in law for 5 1/2 years, and none of us is dependent on another for reasons of financial need, health, or caring for elderly or grandchildren. I can find no articles about similar situations after researching this for the last 4 years. Thanks! Marti

Yes lots of people do this but typically it is for connection.  in the rest of the world besides the US, Canada, and the UK this is quite common.  

I've found articles but it's mostly critic of young adults or couples living with parents/grandparents. I love the idea of shared housing. Done right, it can be a huge savings and there are so many other benefits as well. 

Anyone else out there care to share if they are in a shared housing situation?

Just a quick shout out about how wonderful it is to have a "life happens" fund. I had to buy a new washing machine last weekend -- and it was so nice to be able to do the research and choose the machine with high ratings and the features that I want without having to worry about how I was going to pay for it. Thanks for emphasizing this over the years! It certainly took the stress out of an already unpleasant situation.

 

Read Michelle's column: Unsure what money to save and what to invest? Here’s the answer.

Thank you for sharing. Because I like pots, having a life happens fund makes it easier for me to replace things that need replacing. Otherwise I would fret about spending the money. 

Hello! We've recently purchased a house with my parents (in their 70s) and we (in our early/mid 40s) have a newborn son. Right now I am on maternity leave and we have managed quite well. We live on the top floor, my parents live on the main floor (with a shared kitchen/laundry) and we have a shared basement space. What design suggestions would you have when our baby gets older and starts crawling/walking? I am concerned about baby-proofing all the living areas without cramping my parents' style.

Great Question, there are lots of ways to baby proof without cramping their style.  First I would make sure to have the child locks on all cabinets with the magnetic fob vs the plastic latch or other.  This should handle the bathrooms and kitchen.  Then I would get a squatty potty for everyone which is great for all ages.  the next question would be are they going to watch the baby when you go back to work and if so will it be in your place or theirs?

Michelle -- How do you advise (or not) directing children towards certain careers with higher salaries? I thought of you because of your daughter potentially going into social work. An incredibly important and fulfilling job. And yet it could make it more difficult for her to save significantly, pay for her kids' college, and save for retirement. I know how hard it is to do this on a small salary. With my children still being in high school, I talk to them about the different lifestyles they can have with different careers and about the importance of finding some type of work you can like doing for a long time. But I'd rather they pick a career that makes more money because I want things to be easier for them!

This such a great question. Do I worry my daughters, who both are choosing low-paying careers relative to others -- social worker/child therapist & special education teacher vs. doctor/lawyer. 

Yet, I would never push them into a higher paying field. I truly believe that we all have a gift and we should operate in that gifting. Imagine working 20,30, 40 years in a career you don't like just for the money. What an awful life. 

So, as parents my husband and I have  taught all my kids (my son is probably going into a STEM field) how to be good money managers. They hate debt like we do. They love to save like we do. They are smart shoppers or rather they don't use shopping as a form of entertainment. Even though they are all in college they rarely go to the malls with friends, etc. 

We've also are encouraging them to come home after college to save so that when or if they venture out into their own places (before marriage) they will have a great nest egg to start. We talk about retirement savings all the time. If they start early even on their relatively lower salary they can have save well for retirement. 

Will making more money make it easier? Maybe in terms of what they can afford. But I see ALL the time people making big money and they are broke because they elevate their lifestyle to that bigger paycheck. I've worked with people who are teachers, social workers, etc who have more money than folks pulling down six-figure salaries. 

But to your point, yes those not making six-figure salaries might not be able to have what others have -- mini-mansion, etc. But life can be just as good and they can have what matters even in less paying work. 

Lisa, I  noticed you didn't include a lot of information on the cost of shared housing with your parents and grandmother. Why? And can you share how you managed the costs and any cost savings?

Basically, I paid all the costs for the house, they covered the groceries ( we travel a ton).  They wanted cable and we did not have so they covered that.  On utilities, I covered everything but the water bill which my mother, father and grandmother split.  this allowed them to feel ownership of the home but not be burdened.  If they complained about the internet too slow they had control of it.

Hi there. I paid all of my student loans (in the long run, probably about a total of $20,000) this past February. I worked multiple jobs (a full time non-profit one and various side hustles), threw as much as I could at it, and kept costs as low as I could in a very expensive place to live. Now that I'm past that and have no credit card debt, I've almost built up six months of an emergency fund and a life happens fund. I think the hard part when you do this long enough is actually letting yourself enjoy your money a little. I contemplate every since purchase, even stuff under $10, a lot. It's hard to get out of this mindset. It is also hard since my partner still has debt, and, given we aren't married, I'm not helping. I missed out on a lot of time when I could travel. That said, I'm glad to be debt free, and hope to find some sort of balance financially and "enjoying life" wise. Thank you for your column and all of its regular insights!

I only have my mortgage and make a great living and I STILL fret over spending $10. 

But you can't let that fret impact your fun. This is something I've struggled with but am overcoming. 

So I need you to plan something fun and although you may worry about the money do it anyway. For example, my husband and I have season tickets to Arena Stage. It's not cheap and when we sign up I groan -- a little. However every time we go to see a play, I'm so happy we subscribe. Even if we don't enjoy the play we have great conversations about what we didn't enjoy! 

Embrace being debt-free and enjoy the fruits of your hard labor. 

My sibling has recently floated the idea of sharing housing with them, and their spouse, and their kid. I think it would be awesome, but it's even more uncommon that sharing housing with elderly relatives! Have you heard of anybody doing this? I would only do it if we'd be buying a place because I don't want to start paying rent (I'm not, currently) so that would open up a whole new can of worms. But I'm definitely intrigued.

Great Question!  Yes I have seen this done but its a bit more tricky.  boundaries have to be set and who owns what and which spaces at which times.  The Fridge, kitchen cleanup and the washing machine and dryer can be the largest friction points as well as not cleaning up after ones self.  Have you thought about buying a double?

This is my first year using flex spending dependent care, and I just got the reimbursement for the max amount. It feels like a windfall, even though I know it came out of my paycheck already. I guess logically I don't really know what to do with it... put it back in savings? Use it to pay for the rest of the year in daycare costs? Pay down my car loan? Appreciate your advice!

Split the difference. Save some if your savings pots are not well funded. If you have a decent amount in emergency and life happens then definitely pay down the debt. 

Does buying a car in cash effect your Fico score in any way. Should one tell the dealer not to pull a credit report before making the buying deal?

Don't tell the dealer you are paying cash.

Negotiate the price of the car first. Do not let them pull your credit as part of this process. How you will pay is a separate matter.

Don't entertain any conversation about how you will finance the car. After you get the price you want, then you indicate you are paying cash. And because you are there is no need to pull your credit report. Also  make sure your contract doesn't include some service fee for a loan. I caught a $300 extra charge for loan processing when in fact I was not getting a loan to buy the car. 

 

Hello Michelle, I've been reading your articles and your chats for many years. I am a federal worker for decades and was always saving toward and planning for a retirement at 62 or later. But, I've got stage 4 cancer that doesn't seem to be going anywhere despite chemo and radiation. My work is accommodating. I am finding that working is getting harder and harder for me. I have seen a financial planner who has told me that I'm OK financially if I need to retire earlier than I had planned. This is not what I envisioned for myself and it's not what I had carefully planned to do. I've crunched the numbers. They show that it may be a little tight; but, overall, I will be OK if I retire on disability. The house was paid off years ago. The car is paid off and not that old. The emergency fund and life happens funds are doing quite well despite taking several recent home life happens hits! I've been contributing the max to my Roth IRA for many years and have also been contributing the max to the TSP (both regular and catch-up since I was eligible). I've got long-term care insurance. In my head, I know it really seems like I can do this. I'm scared to take the next step. Thanks for any words of wisdom you care to impart.

I'm so so sorry for your situation. My grandfather, brother and father-in-law had cancer. As did my husband, who has recovered and has been cancer-free for a number of years.

Please if you can manage let go of the job and enjoy your life. You've saved and managed your money well for a time like this when you may need to stop working for your health. 

If you aren't completely sure, you could ask for a leave of absence, if available. Should things turn around then your job will still be there. But if that is not an option, live for you right now. You've gotten good advice and the green light to retire on disability. Take the step of faith because you are prepared.

I wish you all the best!

Hi Michelle, I finished paying my student loans at the beginning of the year and based on your advice, I started to put the same amount of money I was using to pay the loans into a Life Happens Fund (that my boyfriend and I called the Shit Happens Fund). Two weeks ago my apartment building was hit by a F3 tornado and we were evacuated for 10 days. We have insurance and they will cover all our living expenses, damages to our patio and all the food we lost in the fridge and the freezer. While waiting for the insurance to kick in (we should receive the money early next week) we relied on our Shit Happens Fund to pay for new clothing, food and essentials (prescribed drugs, beauty products, cat products). It was a relief to know we had this money easily accessible while we were in the middle of all this and that we didn't have to use our credit cards. Now the money from the insurance will go back in the Shit Happens Fund in the hope it's going to be used for something less dramatic next time.

I'm so glad you guys are okay. And happy to hear you could weather this storm. Thanks for sharing. 

P.S. Can we call it a "crap" happens fund tho! :) 

I plan to freeze my credit at all three credit bureaus. Will that affect my credit score? It wouldn't bother me personally if it did, since I'm nearing retirement and I don't plan on borrowing any money in the foreseeable future. But I'm planning to tell my adult children they ought to freeze their credit too, and I wonder if it will affect them.

Freezing your credit files does not impact your credit score. It will make applying for instant credit a little more troublesome however. But no need to worry about your score.

I wonder about economic differences between families that live with multiple generations. Some families may choose to live in multigenerational households because they have enough resources to make home additions or modifications that can support the needs of household members of different ages. Other households may decide to live in multigenerational households out of financial necessity, these households might struggle to provide the home modifications that others can. In your reporting have you seen or heard about these types of differences?

Great Question, both actually happen.  But there is also a third option where a granny pod gets built disconnected from the house but basically a little bit larger than a camper with a small kitchen, bedroom, bathroom, and living space typically 600 sq feet or less.  Modifications to a house for the elderly is not near as bad as one might think.  Add railings to the steps, change the tub to a shower, add some grab bars and you are basically good to go unless the person is in a wheelchair or uses a walker.  in this case, they need to have a no-step entry and space. 

We have been in shared housing for about 5 months now, ever since I was 6 months pregnant. We share expenses, meals, household chores, grocery shopping, etc. My parents paid for half of the house, and we mortgaged the other half; they pay us a flat rate for their half of the bills each month. The upside to our arrangement is less responsibility for everyone (my parents don't have to worry about paying bills, we don't have to worry about doing dishes); the downside is decrease privacy--although our living space are semi-separated we don't have private entrances or anything like that. My older parents (mid 70s) say another upside is that getting older means there are more risks (e.g. falls, etc.) and it gives them a sense of security while maintaining independence. We are loving that they get to spend daily time with their new grandson, which would not have been possible when we lived 1000 miles apart.

You hit the nail on the head! one of the largest intangible benefits is the wisdom shared between generations which positively impacted us all.  People always say my kids are awesome and we did a great job raising them, I answer back that I didn't raise them we all did.  I worried that my kids would see this as cramping their high school years, but when I have asked them they say it was awesome!  My daughter loved that the fridge was always full. And all my son's friends thought my dad was hilarious :).  Financially it was definitely better for my parents and helped me a great deal with the kids.  The privacy I understand and its important to have "no-go zones" like bedrooms, bathrooms and then assign family room times, especially with kids.  I was raised that you give up your seat when an adult walks in the room but we had to change this when the kids had their time in the family room.  It had to be their space.  My parents had their own den so it works out.

A big Amen on your column about paying off your mortgage before retirement. Because our pension and social security check will be significantly lower than our final salary, the only way we can now afford to retire was by paying off our mortgage early by always paying extra to our mortgage anytime we "found" money (e.g. third paycheck in a month that happens 2 times a year.) And for many people, even the benefit of the mortgage interest deduction is going away because they may not reach the new $24000 standard IRS deduction for married couples when retired.

 

Read Michelle's column: Yes, you should pay off your mortgage before retiring. 

I second your "amen."

Michelle, I wanted to share my saving success. I came out of undergrad with 0 debt, but I wanted to go into a field that required a Master's degree. With combination of leftover college savings (thank you parents and grandparents who value education!), and a graduate assistanceship, I graduated in 2016 with (only) $30,000 in debt and about $3,000 in my savings account. Well now I am saving close to 17% of my take-home pay, am contributing 7% to my TSP (5% match), and for the biggest happiness, I am about to reach $10,000 in savings!! That was my goal for savings for a future move and life happens fund. While I am eligible for PSLF with my job, I looked at the calculations and at the current rate I would pay it off less than 6 months after I was eligible for forgiveness. Since I want a house and kids at some point, I decided that in January that 17% is going to go directly towards student loans to get that monkey off my back. This means I should be able to pay off my student loans in 4 years - 4 years before I'm eligible for loan forgiveness!!! I'm so excited to have reached both my savings milestone and know I have financial stability no matter what happens. Thanks for all your advice along the way!

Thank you for sharing your story!

So I just paid off my house (I'm 35, but live in a LCOL area with a good salary). I have a really good start on retirement, emergency fund, life happens fund, charity giving etc. What do I do next? Is there something beyond "save a whole bunch of money" that's a goal once you've reached every goal that you've heard of financially?

Fun. That's the next step. Enjoy the extra by taking the vacation you always wanted. Or go to see plays. Help family members (We paid for a niece to go to college) and paid for books for another niece.)

Once you've covered all the financial bases -- emergency fund, life happens fund, no debt (except for maybe a mortgage), charitable giving (because to whom much is given, much is required) you get to enjoy your hard work. 

My sister, retired, and I, still working, bought a home together with the mind set of renovating so my Mom, age 84, would eventually be able to move in with us. My sister has her own space in the basement with kitchen, washer/dryer, full bath and is fully independent financially. My son and his girlfriend have moved in with us due to student debt, unable to rent or buy in the Wash DC area. They are all driving me crazy by the way. I and my son work all day, the GF and sister don't get along. I am slowly saving funds to carve out a bedroom, sitting room, washer/dryer and full bath on the main level for my Mom. Should I plan on some kitchen area for her? I thought son, GF, myself and my Mom would share the kitchen. Is that enough room for her to feel independent but still part of the family? She doesn't like the girlfriend but once the GF gets a full time job I'm hoping tensions will lesson. Is it reasonable to ask son and GF to remodel the older bathroom that is just for them? It leaks and is causing water damage (my bathroom is the same boat but I'm covering all costs). They don't pay rent but do pay utilities. The house is paid for but we are still paying for a new AC/Heat system and will be paying for a new roof once those installment payments are done (shared 50/50 with sister). We argue a lot about chores, costs (cleaning, TP, paper towels, pets, the yard work). I don't think I laid down good parameters when they moved in so now I'm slowly going broke feeding (shared kitchen is small and doesn't have much storage space for their food so they don't buy much) and taking care of their laundry detergent needs! Also, I have all of the outside costs like mowing, maintenance, etc that just I pay. We are now 2 years into this, how to get the son and GF to change? I like living with my family members, but not the drama involved for paying for things.

Thank you for the questions and God Bless you!  A kitchen is never "shared" when a woman is involved. no matter the age.  someone has to own it.  This means how everything is stored, whos plates, silverware, pots and pans and who cleans.  who buys the groceries and what happens in you eat someone's lunch that they had saved for tomorrow.  With the sone and GF, they are guests if they are not contributing financially.  I would reccomend setting up some clear written boundries with chores and cost and a penalty system if violated.  as the owner of the house, you and your sister should do the renovations but have chores for the son and GF to help out so that you don't feel like your being taken advantage of.  If it's too much they will leave (not a bad outcome). 

I would lock up your laundry detergent and they can buy their own, also have them get a mini fridge in their bedroom and then the food is theirs unless you want to charge a per day, per person rate.  before the kids went to college, we did this.  my mom would take the grocery bills and then divide at a cost per person and we would pay and my grandmother. fair and square.  when the kids went to college and my husband and I started traveling all the time we changed the system.  Have boundaries and fair splits but remain flexible. 

What a great chat today. Thank you all for joining me. And definitely a big thanks to Lisa Cini for answering the questions about shared living. 

Take care and see you back next week in this same space. 

In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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Lisa M. Cini
Lisa is an award-winning designer with more than 20 years experience developing the interiors of long-term care centers. Her company, Mosaic Design Studio, is a provider of design services for senior living, long-term care and health care institutions.
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