Liz Pulliam Weston: Finances and multigenerational homes

The Basics

Should you live like 'The Waltons'?

Multigeneration households are back. Though living with your parents again -- or with your adult offspring -- will save money, it can be challenging. Try these 4 tips to cope.

By Liz Pulliam Weston
MSN Money

Rebecca Crossman, 41, was ready to move closer to her family when she retired after 21 years in the Air Force. She got a little closer than she had expected.

Crossman now lives with her mother and her older sister in upstate New York. Mother Dottie, 72, moved in after she had a stroke, then Crossman talked her sister Debbie Lloyd, 45, into joining them.

Lloyd makes the payments on the loan that Crossman took out to turn her basement into an apartment for her sister. The siblings work together at a center that helps special-needs children, Crossman as an administrative assistant and Lloyd as a teacher's aide.

Lloyd "had a job working at a deli-grocery that she liked, but she always wanted to work with children with disabilities," Crossman said. "Now she can work for $9.50 an hour and not worry about paying the bills."

Crossman said she "never could have envisioned this scenario" before it came together, but the three women said they enjoy living together.

"It's working out better than I could have ever expected," Crossman said. "Mom buys the groceries, my sister cooks, and I clean up. What's better than that?"

The Crossman-Lloyd household is part of resurgent U.S. trend: the return of the multigenerational household.

Multigenerational households by the numbers

A record 49 million Americans, or 16.1% of the population, lived in a household that contained at least two adult generations in 2008, according to a Pew Research Center analysis of census data. Of that group, Pew reported that:

  • 47% lived in a household with two adult generations of the same family (with the youngest adult being at least 25).

  • 47% lived in a household with three or more generations of family members.

  • 6% were made up of a grandparent and grandchild, but no parent.

The Great Recession, with its high unemployment and foreclosure rates, is accelerating the trend. U.S. multigenerational households rose by 2.6 million, or more than 5%, just from 2007 to 2008.

But the popularity of multigenerational households has actually been on the rise since 1980, driven in part by an influx of Asian and Latino immigrants for whom living with parents and grandparents is often the norm.

It used to be more the norm for U.S. households, too. Around 1900, more than half of people 65 years or older lived in a multigenerational household, the Pew report said. At the end of the Great Depression -- the period in which the multigenerational TV show "The Waltons" was set -- one in four U.S. households had multiple adult generations.

(In researching my own family history, I was struck by how often grandparents lived with their adult children and grandkids -- and often a boarder or two, as well.)

Better health, bigger safety net, growing suburbs

The trend declined as older adults got healthier and more prosperous, thanks in part to the creation of Social Security and growth of work-related pensions. The Pew report also cites rapid growth in the "nuclear-family-centered suburbs" after World War II and a decline in immigrants for the retreat of multigenerational homes, which bottomed out at 12.1% of all households in 1980.

This time around, seniors are once again moving in with their adult kids -- perhaps because the "outsized" baby-boom generation provides more households from which the elders can choose, the Pew report speculates. In 2008, 20% of people 65 and over lived in a multigenerational household, up from 17% in 1980.

But there's been a far sharper rise in the percentage of people age 25 to 34 living with their folks. In 1980s, just 11% of adults in this age range lived in a multigenerational household. In 2008, 20% did, and the figure moved up a full percentage point just from 2007.

Later marriages, a rising number of college students and a big jump in unemployment have contributed to the trend. In 2009, fully 37% of people 18 to 29 were not in the work force, Pew research showed. Moving in with Mom and Dad -- or never leaving -- has been a financial survival strategy.

Continued: Problems solved, problems created

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