Updated on 11.15.07

The Finances and Interactions of Alternative Living Arrangements

Trent Hamm

Recently, there has been some talk in our house of inviting my wife’s sister to live with us on a permanent basis (in fact, my wife and I have already extended the invitation and she is thinking about it, though it is far far far from a done deal). We have the room to allow for this arrangement easily, so that’s not a concern, and our personalities mesh very well, so that’s not a concern either.

What does worry us a bit is the financial arrangement. Should we expect her to pay rent for what amounts to use of our basement as an apartment? What about other living expenses? Should this be treated like a rental arrangement? What about food expenses? What about expected behavior?

Even situations that seem on paper as though they would go quite well often fall apart due to expectations left unfulfilled and feelings left unchecked. I’ve experienced this in the past with college-era roommates (all but two of them, in fact, were problematic and the remaining two wound up being my wife and the best man at our wedding) and I’ve also seen it create some very uncomfortable feelings in other family situations.

Our approach to solving this is to have a few meetings where we simply lay all of this out on the table before we even get started. We’re planning on such a meeting around Christmastime where everything will be laid out on the table and all three of us (and even to a degree our son, who is just over two) will give our opinions and thoughts on any issue that could potentially concern any of us about the arrangement.

For example, I personally don’t feel that she needs to pay rent, but I would like help with the grocery bill. However, if I were to turn things around and be in her shoes, I would feel obligated to pay rent in some fashion, and if she feels that way, then it will be pretty easy to work out a fair number (basically, whatever she feels is fair).

Similarly, I’m very open about the behavior she can follow in our house (basically, as long as she follows some basic tact around the children, I’m okay with whatever choices she makes as an adult), while my wife is somewhat more nervous about it than I am. Along those same lines, my sister-in-law is probably harboring some concern that she would be viewed as a live-in babysitter, which I have zero interest in whatsoever.

These issues need to be discussed fairly and openly. If that doesn’t happen, someone is going to start feeling uncomfortable eventually, and that discomfort can easily grow into a serious issue.

On the other hand, if you’re considering a cohabitating situation and you’re not comfortable enough with the person to discuss such things this openly, you should strongly consider not doing it at all, because there are already factors at work reducing the comfort level to a point that you can’t talk about things and cohabitation will just make it worse.

What do I personally feel is appropriate? It depends entirely if you are willing to view this person as part of your immediate family or not – and I’m quite willing to with my sister-in-law. If it is more of a situation where the person is just “renting” a small portion of your home, then I feel that a rental payment should be required and negotiated and that food should largely be kept separately unless there is a shared food arrangement as well.

With family, though, much of that is out the door. I would expect that the new person would function just as siblings would as children – treating each other roughly as equals, sharing most possessions, and so on. I do not expect any rent payment, but I would expect an appropriate share of the food bill and perhaps some utility assistance since there will be a bit more energy and water usage than before. Anything beyond that is entirely dependent on the comfort level of everyone involved – some people will feel obligated to pay some amount of “rent” while others will see it as family.

As for interaction with our children, she’s still their aunt. I would expect that she would spend some time with them, but I don’t expect her to be a third parent or a permanent babysitter in any fashion. She’s chosen not to have children, so it would be foolish of me to expect her to be the parent of my children.

Whatever the expectations, though, I feel quite strongly that it should be talked through in detail before taking the plunge.

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  1. Roberta says:

    I lived with my cousin and her family (husband, 2 teenagers) for 1 year. I agree you should have those meetings before your sister-in-law moves in, but also have some meetings on a regular basis. Every 2 months or so works well. No matter how well you get along it can be difficult to live with someone new. The more opportunities you create to communicate and clear the air the better. Also, agree up front that you are family first and housemates second. Sometimes you will have to agree to disagree or put hurt feelings aside for the sake of the relationship. Instead of grocery money which can be flexible, a set amount of money on a monthly or bi-weekly basis is better. This way both parties know up front what is expected and budgets can be adjusted accordingly. My year with my extended family was difficult sometimes due to loss of privacy, but I wouldn’t trade it for the world. I have many, many wonderful memories that will last me a lifetime and it only deepened the friendship I had with my cousin and her husband.

  2. guinness416 says:

    Good for you. Perhaps you should build in the expectation that you’ll have a progress meeting after 3 months or something, to review everything you decide up front and check in on how everyone feels generally. This is the sort of living situation that can get miserable for either party without open communication though, that’s pretty key.

  3. Anon says:

    My sister in law recently moved out of our house after living with us for a year. I would anticipate your utility bills increasing dramatically. For example our water bill doubled even though we were already a family of four (similar to you and your wife and two young children). Also there are small things that can really make a frugal person crazy but that you might not feel comfortable addressing. For example she used to run our dryer to de-wrinkle her clothes and wash her work uniform every day. Also there are typical, person-without-kids issues: for example my daughter burned her hand on my sister-in-law’s curling iron which had been left on and in a reachable spot. It was a difficult year and I hope that now that she has moved on our relationship can get back to the way it was.

  4. Kevin says:

    Not knowing why your inviting your sister-in-aw into your this my not be appopriate but…

    I’d ask for a small amount of money to help pay for the taxes on the your place. That way she can be contributing to the family and not just freeloading. Paying a small portion of the utilities also wouldn’t be out of the question probably.

    Since she’s family, she should contribute to the family, she can’t be on the same level as your two yr old. She’d probably feel awkward.

  5. Margaret says:

    One of the best pieces of advice I ever heard about having someone live with you is to establish at the beginning a DEFINITE end point. Whatever the reason for having her live with you (and obviously it is not to help you pay the mortgage or you would be asking for rent), establish first how long the arrangement will last — is she saving for her own house? — does she have a temporary work contract in your area? — recently divorced/separated? Have an end point (maybe one year, maybe 6 months), and if things are going well, you can always extend the invitation later. While you are comfortable having her now, you may feel differently after several months, or if she brings home a significant other whom you detest, or her personality changes. If things are a little rocky and you think you won’t want to continue the arrangement but it’s not so bad that you need to kick her out now, then knowing that end point is coming will help you ride it out with fewer hard feelings.

  6. I had an alternativ living arrangement a couple of summers ago where I moved in with a married couple that I met at college. They were happy to take my $300 a month rent and I got a room an was able to use their house as if it were mine. I did plenty of cleaning, was a good renter, and it worked out really well!

  7. Mrs.Frugal says:

    My husband and I recently stayed with my boss for several weeks. It worked out suprisingly well. We tried to go out of town and stay with friends or family on the weekends to give them sometime to themselves. I watched her children one night a week (in addition to the everyday job that I have watching them) and my husband took over mowing their lawn. We shared cooking and grocery expenses. They enjoyed getting to know us better and we got to know them a little bit better. Now we still go out to eat sometimes or spend time hanging out.

    It definately was a short-term fix though and won’t work for everyone. We had (I had) decided I couldn’t live with either set of parents unless we had no other option (since that would mean we would both go unemployed and move).

    Just make sure you determine some privacy measures so that your family still has time to be its own family without extras.

  8. Diane says:

    Trent, proceed with caution. Women are very territorial!

  9. Well I just hope you won’t have to babysit her and feel compelled to include her in every family event.

    Does she have any plans to move out/get married etc, or is she staying for good?

  10. devil says:

    Trent….don’t do it. Just don’t.

  11. Felis says:

    If you have her contribute to groceries, talk about what happens if you buy food she doesn’t like. Me & hubby lived with the in-laws and we paid for half the groceries, but I didn’t always like her choices and would have to go do a supplementary shopping so we’d have lunches we could take to work. It wasn’t a major problem, but something to add to the conversation.

    Also, talk about annoying little things like, how warm to set the heat, crazy long hot showers, and leaving lights on or not. As much as you get along, it’s still good to have a plan to air out the nuisances so they don’t add up!

  12. Kat says:

    Are you prepared for how your relationship with your wife will change?
    My sister stayed with us for 3 months this summer and it was interesting. All of us get along, but we found ourselves going out to dinner a lot more for more “us” time. Of course we have no children, so maybe you are used to less “us” time.

  13. Stu says:

    having been here before, share of food bill and share of the water bill is what I paid. DIdnt pay rent as the room I was in was unused so I was not putting my friends out of the way to accomodate me.

    Whatever it is tho, needs to be clear up front as changing the rules 3 months in makes things seem underhanded. :)

  14. Jazmin says:

    We’ve had friends and family live with us off and on since before we were married. (9 yrs ago now). Currently my SiL is living with us temporarily (been 3 months, moving out in 2 weeks). Lots and lots of communication. Before and during. It’s the little things that really add up to annoyances, but discussion helps a lot of that. Definately discuss food. Joint groceries? Joint cooking? Or complete seperate. With the friends who’ve lived with us we went with rent (flat rate, including utilities) and then no shared groceries/cooking but fully integrated in the house. With the SiL (especially as it was only a temporary situation), the ‘rent’ included utilities and groceries. She’s a full time student with a quirky schedule and if she’s home, she eats with us. If she’s not home, she forages for herself and adds what she wants to the grocery list.

    It can work. It can work really well, there just needs to be plenty of communication. Oh and a good sense of humour and a bit of mellow doesn’t hurt either! :)

  15. dawn says:

    I am all for helping out family, because family comes first! Yet I see nothing wrong with having her pay a token rent of some kind. It will help out with the small increased cost of the household. And it will help her feel like a contributing member of the household. I believe you will actually make the situation more comfortable for all parties included if you charge a reasonable token rent :)

  16. Christy says:

    Are you really going to pay attention to what your two-year old says about this? Does he have the power to scuttle the whole deal? Being aware that having another adult in the house will affect him is one thing, actually letting him contribute to the decision making is quite another.

  17. Allie says:

    Maybe instead of rent money, if that’s not an issue, what about working out a cleaning or cooking schedule? That would free up some time for you and your wife to spend with your children which might be more valuable than the cash.

  18. Mike says:

    I was going to write “Don’t do it.” But then I realized I was really feeling envy at some level. I’m envious that anyone could feel so close to family to even consider a long-term arrangement like this. I can barely stand four straight days in the same house at Thanksgiving!

  19. George says:

    Establish a written rental agreement, even if there is only a token $1 rent.

    Why? Because if you decide she should leave and she says no, then you will have no legal standing to “evict” her.

    The horror story comes from a coworker, whose mother-in-law came to stay. When m-i-l relapsed into using drugs, they couldn’t kick her out unless she wanted to go!

  20. JReed says:

    She absolutely should pay rent, utilities and a food contribution. Giving a person a cushion to sit on just invites him or her to stay seated. It is not good for that person in the long run.
    Everything needs to be negotiated before she moves in…friends coming over? parking? laundry? music? TV? extra refridgerator? Don’t assume she will automatically have the same thoughts as you regarding these matters. If she pays a legitimate rent, you will resent indescretions far less.
    If you really want to help her out, escrow some of that rent until there is enough for her to get her own space.

  21. Kathy says:

    I think you must be a very kind and generous person….

    When I lost my job at age 43 for the first time ever, I found a job within 6 weeks in a major metropolitan area that my sister and her husband lived in.
    They invited me to stay with them.
    Then they apparently had second thoughts, but wouldn’t tell me. So as soon as I arrived, within ten minutes…. they whisked me back out the door to go look for apartments. I had not paid rent or house payments for many years, so the high prices were a shock, coupled with the fact that I didn’t know a soul there but them, had to have a map to get around anywhere in the city, and still had mental shock or PTSD from the downsizing.

    Instead of talking directly to me, and TELLING me they had a change of heart, they would get in their car and leave and have private powwows about what should be done about me.

    I am not a deadbeat.

    I held down a well paid, responsible job for 23 years. I never asked anybody for anything, in all that time. Ever.

    They even called my mother and complained about the most assinine things, like my using hairspray in the bathroom created cleaning problems.

    Finally, the Lord took me out of there. By a twist of fate, I found a church with a few blocks, and the pastor helped me find a place to live in a private home for $200 a month and no lease. I was out of their house in five weeks, and it was truly a Godsend.

    Please, please, whatever you do…. be open and honest with each other. Really weigh it before you act.

    I’ve truly forgiven them, but I would be foolish to forget what happened. I could never really trust them again in the same way, and at that time, I really needed very badly to be able to trust someone and lean on them. It wouldn’t have been for long, I’m not made that way.

    A big eyeopener, but I guess in hard times you find out who are your true friends. And you may not want to really know.

  22. Beth says:

    I think this is great! From my (vast) roommate experiences, I’d say that the biggest frustration can come to people with different kitchen styles. Will crumbs on the counter or dirty dishes in the sink be a problem? Will you be tempted to reload the dishwasher the “right” way, grumbling under your breath the whole time? (I might closely resemble someone who’d do that…)

    Also, think about refrigerator/counter/cabinet space. If she’s going to live there for any amount of time, it’ll be a good idea to give everyone some idea of boundaries: is everything truly open to everyone? What if the cheese you had mentally earmarked for burritos gets eaten up on a midnight refrigerator raid?

    Labeling is always a plan, or having a dedicated shelf/drawer for food that is either open for any use, or is off limits for some reason.

    If it’s going to be her house too, she’ll either need to have her own space to store her things, or she’ll need a way to feel like she really knows what is okay and not okay to touch/use/eat etc.

    All that having been said, it can be a great experience and I hope it works really well.

  23. Samantha says:

    My sister-in-law lives with right now and has for about a year. In some degree it was worked, in others, not so great. I have felt myself getting upset about some things but didn’t want to rock the boat. But overall, we get along much better now then ever before. And I will admit that I’m not an easy person to live with :)

    When we do move, I am NOT planning on asking her to come with us though… Some alone time with my family will be nice.

    Also you don’t need to necessarily call it “rent” money or “utility”, “food” money. Just agree on an amount that you are both happy with. Something that will cover the rise in utilities and food but not change from month to month.

    good luck and let us know if she ends up taking your offer.

  24. My opinion, based on something similar that I did years ago, is to not go through with it. Certainly at least not with the word ‘permanent’ attached to the deal.

    Make sure you lay out the rules ahead of time and include an exit strategy at the start too.

    Most people can be hard to live with. Unless you all really have just the perfect match of personalities I would really lean the other way on this one.

    That being said, I wish you well either way.

  25. klf says:

    Lay out all the ground rules clearly and before she ever moves in, and have regular discussions during her stay to ensure that everyone is OK and to head off any potential problems at the pass. Make sure that everyone knows what is expected of everyone else. All of the posters above have good advice.(Dawn hit the nail on the head…a token rent is excellent advice…sis won’t feel as if she’s freeloading, and neither will you and your family feel she’s freeloading or taking advantage).

    It is my experience that it’s when neither side says anything out of politeness and then whatever annoyance there is gets blown so out of proportion, you are left wondering what the heck happened, and then there are bad feelings and some relationships never recover.

    Family always comes first, except in those cases of unforgivable familial traumas (abuse, etc.).

  26. Peter says:

    Trent, how is this different than providing support to your adult child (e.g. no/limited rent payment, some charge for utilities, etc.)? You may also want to look at that thread and consider those responses in your decision since I’m seeing some of the same issues coming up.

  27. tuck says:

    END POINT. END POINT. END POINT. This can always be re-addressed or re-negotiated by her if necessary, but speaking from experience, there needs to be SOMETHING put down. This puts the onus on her, and you don’t have to feel pressure.

    On the other hand, there should be a written agreement that gives you the right to get her the boot (with enough notice) if things don’t work out.

    She should chip for utilities. Knowing you, Trent, I’m sure you know exactly how much you pay, so it should be easy to figure out her increase.

    I would suggest a nominal, but not token rent. What’s the going rate for a studio or 1 bedroom in your area? “Then give her a family discount.” So if the rent is $600, you could charge 300, or whatever.

    The reason I say this is that you say that you would expect to pay rent in her position. That will inevitably creep in, esp. if it’s the seventh month and she’s starting to be a pain. Plus, if Mrs. Trent is already nervous, at least the money will help on a material level. And I think you get better behavior from someone who has a financial stake in things.

    Man, this is long. Sorry. Just had some bad experiences, want you guys to avoid them. Good luck!

  28. JB says:

    Having an extra person in your home will incur extra costs; water, electricity, gas, food, etc.

    My recommendation is to sit down all together and come up with a monetary amound she is to contribute monthly. This will go towards rent, water, electricity, cable, groceries etc. Your family shouldn’t have to pay extra costs out of pocket, but I do admire your willingness not charge rent, etc. Also talk about chores.

    But sometimes people feel more invested in a situation and more a part of a unit when they are contributing. Her contributing a small monthly amount could help her and you & your wife all feel balance and harmony.

    YOu didn’t mention her age or income, and that’s something to consider too. I understand not charging an adolescent or college aged relative much. But someone in their mid 20’s beyond would be paying way more on their own anyways, and you and your wife are in a position to help her be responsible.

    Overall I think it’s great. Life is all about family and being there for one another. It could be great for your kids to have an aunty so close by! I really would charge a small amount though to cover your families extra costs and make sure she is vested in the situation and not taking advantage of you all.

    Something else maybe to consider. Is she saving up for something in particular? Maybe while living in your home for a small cost she can save up to buy a place of her own? Sometimes when people have extra money around they are more apt to spend it on wasteful things, having a goal could be helpful.

  29. Ana says:

    Just my opinion–don’t do it. My sister moved in with me for a period of time quite a while ago because she had no place to live and I wanted to help her out. Unfortunately, that worked out about as well as when I give her money to help her out–there was a reason (many) why she was in the homeless/broke position she was in, most of which related to her own stupid choices.
    I can see no reason to let an adult live forever, rent free in your home. If she must live with you, set a move out date and definitely have her pay rent (which you can put into your kids savings accounts if you have no need for it).

  30. Susan says:

    Hi Trent,

    As a family therapist – I would like to commend you on your willingness to extend your home to your sister-in-law. I agree with all the others that communication is the key. I would recommend that you schedule weekly family meetings so there is set time to talk about differences, conflicts, schedules, money, house rules, child behavior issues, and overall well-being. I would also suggest scheduling some “fun” activity for the meeting as well – such as a yummy breakfast. The point is to have good communication – not a gripe session. There will be differences and conflicts – so work out a process for resolving problems at the beginning.

    With some good work up front and regular communication, it should work out for everyone.

    Good luck!

  31. LC says:

    My sister lived with my husband and I for a few months this past spring. We did not have a rental agreement or a set end point, but she was only living there while waiting for another possible roommate to finish up a current lease. However, there was the possibility that she would stay longer. Since our schedules were different, she ended up not sharing meals with us.

    The situation worked out very well. She was responsible for cleaning her bedroom, bathroom (also the guest bathroom), and she also cleaned the kitchen every now and then. I think the reason it worked out so well is that she has similar interests and values to the 2 of us. We don’t have kids, but I think it could be even better with kids since they would get to know their aunt better.

    I would definitely ask for some amount of payment assuming she is able to afford it.

    I charged her more than her “cost” in utilities, but still about half of the lowest rent she could find elsewhere. I think this was perfect because then she wouldn’t feel like she is mooching and you won’t resent any possible annoying behavior because you’ll be making a small amount of money.

    I would say go for it, and I wouldn’t worry about a formal lease or a specific end date. I would assume that if you are considering this arrangement, you guys are pretty open with each other, but I would just make sure all parties feel comfortable bringing up any major issues that may arise.

    Go for it and good luck! Our situation turned out good all around :)

  32. vh says:

    Great galloping zot!

    Hope you read ALL your admirers’ comments carefully, Trent! And lissen up.

    “Personalities mesh” is a far cry from “we won’t want to kill each other after living together for a few weeks.” If she doesn’t have kids and she doesn’t fully appreciate what “frugal lifestyle” means, you need to talk through all the issues pertaining to child care, child craziness (yup), and child safety so that she will know what to expect in your house and what you expect and need from her. She needs to understand, for example, not to walk off and leave the iron on (!) or her hot curling iron on the bathroom counter (ack!) or to leave a bottle of allergy pills where little hands can find them or to indulge herself in TV programming you don’t want the kids exposed to…and on & on. And you need to understand that as a young adult she needs privacy, autonomy, and at least some quiet time, and that she almost certainly will not do things, day-to-day, the way you do them.

    In the money dept, she may not feel comfortable unless she pays at least some token rent. You should discuss this. She certainly should split the utilities with you in a fair proportion, since you ain’t seen utility bills till you add an extra adult user for a month! (Especially if she has long hair that requires shampoo & conditioner a good long rinsing after each in the shower every day; especially if she’s in the habit of leaving the lights on when she walks out of a room; especially if she’s not into wearing a jacket around the house in wintertime.) Ditto food: you’re buying more food than she is because you’re feeding two grown-ups and two kidlets.

    After my best friend and her husband came back from three years as charter-boat operators in the Caribbean, they moved in with us for three months, bearing a cute little girl and a curly-haired black cockapoo. It was a difficult time for them, even though they were solvent, because as it develops when you live on a boat you don’t have a driver’s license and you don’t build much of a paper trail and soooo…you don’t have credit and you can’t persuade a landlord to rent to you and you can’t even get a bank to open a checking account for you. They needed time to get local jobs and re-establish themselves as mainland citizens.

    My husband made a ton of money and so the extra costs were irrelevant. My friend and I were Killer Cooks, our house had a gigantic kitchen with two separate sinks & prep areas, neither of she nor I had fulltime jobs, and she and I reveled in making wonderful meals. We were all young and good friends at the time, and so for us it was a lark. But, uhm…if I could’ve found a way to kill her dog without being found out, I’d’a dun it.

    We were lucky that we all got along well. But lucky or not, you’re well advised to think through and discuss all the eventualities and, since you, Trent, do not appear to rank among the top 3 percent of U.S. earners, as my hubby did, it would really be smart to talk about financial arrangements (maybe put them in writing?) upfront!

  33. MVP says:

    Yikes, I would NEVER do this. But I’m a fairly private person and even get anxious around the holidays when I have to see lots of family all at the same time in an enclosed space : ) IMO, it’s just inviting trouble. If this were an emergency, I’d do it to help a loved one out, but making it semi-permanent may become a problem in the future. These relationships are just too delicate to risk over a simple convenience. Too many things can go wrong. What if she slips and falls and sues you? What if your kid pulls her steaming cup off coffee off the table and scalds himself? What if she becomes a druggie or brings strange people around all hours of the night? I know, these are extreme, and you probably know her well enough to know some of these things won’t happen, but you get what I’m sayin’…

  34. Bill says:

    If you’re not looking forward to that conversation, I just read a great book called “Difficult Conversations.” I thought it was an excellent read. If it won’t help your situation now it will definitely help in future difficult conversations.

  35. Ro says:

    A lot of good points about communication have been made and I agree that communication is the key. I’m not sure I would do this unless there was a specific reason….ie, she was looking for an apartment and needed somewhere to stay in the interim, she was on an extended family visit, she was looking for a job..something like that. But I am a private person as well and would not do well in this type of situation under the best of circmunstances, it might be totally different for y’all. Good luck with making your decision.

  36. t says:

    This is a good topic!

    1) Earlier this year I got married, and my new husband moved into my condo… but my roommate of 3 years stayed, too. We docked her rent some, and now we’re all saving money. The number one issue was making sure chores were split evenly – but with that taken care of, it’s been just a fantastic arrangement. Americans are pretty unusual in being so averse to living with more than two adults in a house, and while I understand the advantages to our system, we miss out on some great things, too!

    2) One thing I’ve been considering for the past year or so is whether it would be feasible to share a home with another couple when we get to child-raising years. Where I live, there are rich neighborhoods with giant houses and good schools, or neighborhoods with condos and apartments and small houses (which I strongly prefer, for personal reasons, out of frugality, and for environmental reasons) but with terrible schools. If we were to buy one of the larger houses but share it with another couple who had the same goals, we could in some ways get the best of both worlds.

    My husband likes this idea in the abstract, but is (rightly) very concerned about things like “who would legally own the house, and what would happen when someone wanted to move before other people did…?” I would love to hear if anyone’s done anything like this, and what their experiences were like!

  37. EA says:

    Lots of good stuff here in the comments about money, utilities, cleaning styles and kid issues

    One thing I didn’t really see addressed was guests. What happens if your SiL gets a boyfriend (or girlfriend, whatever) who starts sleeping over five nights a week? How do you evaluate if that person is someone you want around your kids? Especially if you’ve never met them before they start sleeping over. What about other guests (e.g. a study group or whatever) who don’t know the rules about the kids and do something dangerous/inappropriate?

    Guests are just one more issue that should be talked about so your SiL knows what’s expected/appropriate.

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