When should your children start paying rent when they live at home?

Raising children isn’t just about supporting them through school and early adulthood, it’s also about preparing them for life’s financial realities. As the cost of living continues to rise, more young Australians (and young adults worldwide) are staying at home longer to save money, finish study, or get ahead before moving out.

For parents, this creates a tricky question: When should your adult children start paying rent if they continue living at home?

This topic is both financial and emotional. On one hand, you want to provide support and stability; on the other, you want to help your children build independence and learn the value of money. And, of course, keeping another adult in the household isn’t free as the additional costs of utilities, groceries, insurance, and wear-and-tear all add up.

With open communication and a clear plan, you can create an arrangement that supports your child’s journey to independence while protecting your own financial wellbeing.

Understanding the purpose of ‘charging rent’

Asking an adult child to contribute financially is not simply about covering household costs. It can also help them:

• Build good financial habits
• Understand the true cost of living
• Learn to budget and manage cash flow
• Prepare for the costs of renting or owning a home
• Avoid relying too heavily on family support

At the same time, it can help parents maintain fairness (especially when there are younger siblings), ensure household expenses are shared appropriately, and prevent resentment stemming from ongoing financial strain.

When to consider asking your child to pay rent

There’s no single ‘right age’, but there are common triggers that suggest it may be time for a contribution:

1. When they start earning a regular income – once your child has full-time work, part-time hours, or an apprenticeship, contributing to household costs becomes both reasonable and educational. Even a modest amount can help them form lifelong habits.
2. When their stay becomes long-term rather than temporary – if living at home shifts from ‘a few months after uni’ to ‘several years while saving for a deposit’, a more structured arrangement becomes important.
3. When expenses noticeably increase – extra adults in the home increase household consumption; electricity, groceries, water, petrol, internet; and these rising costs may warrant shared contribution.
4. When financial responsibility is part of building independence – if your child is struggling with money management, paying rent can help create structure and routine.
5. When parents need to protect their own financial security – charging rent can help cover costs, avoid dipping into savings, or reduce pressure when preparing for retirement.

Setting the right amount

There’s no universal formula, but several approaches work well:

• Percentage of income – common method is charging 10–20% of your child’s after-tax income. This keeps contributions proportional and fair.
• A fixed weekly amount – some families choose a simple figure, $100–$200 per week, covering food, utilities, laundry, and accommodation.
• Cost-sharing model – alternatively, divide specific expenses such as groceries, electricity, or internet.
• The savings strategy – many parents quietly save part or all of the “rent” and later gift it back when their child moves out, buys a car, or saves for a house deposit. This approach teaches responsibility while still providing long-term support.

Whatever method you choose, transparency is key. Explain what the contribution covers, why it matters, and how it fits into their long-term financial wellbeing.

More than rent – teaching financial life skills

To truly prepare children for independence, consider broadening the conversation to include:

• Budgeting and cash flow planning
• Understanding household bills
• Setting savings goals
• Building a credit history
• Planning for emergencies
• Managing long-term goals like deposits or overseas travel

These habits can make the transition to independent living much smoother.

Navigating cultural and family differences

Every family is different. In some cultures, multigenerational living is the norm, and financial contributions may not be expected. Consider your family’s values, cultural background, and individual circumstances when deciding what works best for you.

Addressing challenges and special circumstances

Charging rent can sometimes create tension or resentment, especially if expectations aren’t clear or if the child is struggling financially. To avoid misunderstandings:

• Communicate openly – discuss expectations and reasons for your decision.
• Be flexible – if your child is studying, unemployed, or facing challenges, you might adjust the arrangement to fit their situations such as reducing rent or focusing on non-financial contributions.
• Consider a written agreement: Even an informal note can help clarify expectations about rent, chores, and what happens if circumstances change.

Real life examples

“We agreed that our son would pay 15% of his income, and half of it goes into a savings account for his future.”

“My daughter helps with chores instead of paying rent while she’s studying full-time.”

Supporting your child without compromising your own financial goals

Parents often place their children’s needs above their own, but long-term financial security should not be sacrificed. Integrating your child’s living arrangements into your broader financial plan ensures:

• Your retirement strategy stays on track
• Household costs are fairly represented
• You avoid relying on debt or dipping into savings
• Supporting your child remains sustainable

Setting boundaries is not only responsible, but also an act of good financial stewardship.

When to seek professional help

A financial planner can help you navigate the practical and emotional aspects of this decision. Support may include:

• Designing a fair rent or contribution model
• Helping your child create a realistic budget
• Setting savings targets for your child (e.g., first home deposit)
• Ensuring your own cash flow and retirement goals remain protected
• Structuring family financial arrangements in a way that supports harmony and long-term wellbeing

Ultimately, the goal is to strengthen the financial position of every family member.

In conclusion

Asking your adult children to pay rent is not about profit or punishment; it’s about preparation. With the right approach, it teaches valuable money skills, supports their transition to independence and adulthood, and protects your own financial wellbeing.

By combining clear expectations, open communication, and thoughtful planning, families can create arrangements that work for everyone; ensuring children are set up for financial success while parents remain secure in their own future.

Meet Joel at Solace Financal or Find a Planner near you!

The Money & Life website is operated by the Financial Advice Association Australia (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.