By Scott Page
One way for seniors to cut living costs is to consider cohabitating with friends or relatives. Whether you are planning such an arrangement or the struggles of a relative have thrust this situation upon you, it can be a positive experience if you set some ground rules and manage expectations.
Sadly, many retirees are facing increasing costs and growing bills without additional sources of income. Seeing the budgetary writing on the wall, about 11% of seniors live in households headed by friends, their children, children-in-law or other relatives besides their spouse. They are choosing to share expenses and living arrangements with a friend or relative instead of facing financial shortfalls on their own. Still others have struggled to the point that they lost their homes and are forced to make drastic changes.
If a friend or relative is moving in, here are a few guidelines:
Put it in writing, if you can. Make an agreement which describes what each party expects of the other. If a friend or relative is moving into your home, it is probably best to have an actual lease — but that may be a tricky request between family members. At a minimum, you should have an agreement that covers the basics.
Timeframe. If the move to cohabitation is meant to be temporary, then it is important that a timeframe for the living arrangement be set. One thing that’s sure to damage a relationship is if a friend or relative overstays their welcome.
Rent, utilities and other arrangements. If an adult is moving in with another adult, each party should be responsible for their fair share of the costs for the home. If a homeowner is taking-in a relative, they should expect to receive fair compensation for the roof they are now putting over their relative’s head. An agreement should specify the monthly rent amount and utility costs and when payment should be provided to the homeowner.
If the person moving in plans to do chores or perform labor in lieu of or as partial replacement of rent, then this should be detailed in the agreement. Spell it out: “Uncle Bob will be in charge of cutting the grass at least twice per month, shoveling the driveway at least weekly during the winter, cleaning the pool once per week” and so on.
Groceries, cooking and cleaning. Costs for food seem to constantly be on the rise, and seniors on a fixed income feel the pain when their budgets change. If a friend or relative moves in, then they need to be responsible for their share of grocery and food costs. At the same time, no one wants to feel obligated to wait-on, cook and clean for a house guest. Rules for cooking and cleaning should be established from the outset. And in my opinion, everyone should do their own laundry.
My house, my rules. Just as good fences make good neighbors, well delineated house rules will make cohabitation plans run more smoothly. If one resident goes to bed early in order to wake early for work, then the other residents need to respect quiet hours and a reasonable time for “lights out” in the common areas. There should also be a meeting of the minds regarding smoking, drinking and overnight guests. No one says you need to be a prude, but close quarters can make one person’s hobby or habit another person’s torment.
Privacy is a two-way street. We all need our space so anyone moving in with a relative has a right to a private space, particularly a senior who might be used to living on their own. At the same time, a homeowner may grow very territorial about their house and belongings. Mutual respect of privacy is a critical component of any cohabitation arrangement.
For most of us, our home is our largest asset and has served as a cornerstone of our financial lives. Taking in a border — be it a friend, relative or stranger — can help supplement income and even improve quality of life. The most critical factor is that such arrangements are structured so they make sense for all parties involved.
Scott Page is President and CEO of the Lifeline Program, one of the most innovative, forward-thinking, and highly respected life settlement providers in the market today. He’s also the author of the newly published book, It’s Never Too Late: Growing Older, Wiser, and Worry-Free in Our Golden Years (February 2016).