There are numerous tough discussions that parents face when raising their kids, from sex, to alcohol and drugs, yet many parents never have this “talk”. By “The Talk”, I mean your expectations after college regarding whether your adult children are welcome back home, if yes, and under what conditions.

For each adult child living at home, it’s likely that you are incurring additional monthly expenses of $1,000 or more. What, you say that’s not possible? When you include their monthly cell phone bill, car expenses (gas, insurance, maintenance) and health insurance, etc. not to mention the extra food and utilities, it adds up quickly. In two years, that’s $24,000 that you could have socked away for your retirement. When viewed from your child’s perspective, living at home is a pretty sweet deal as long as there aren’t too many rules or conflicts. By avoiding this talk, you are not helping to launch your adult children on a path toward financial independence, nor are you helping your retirement savings. Remember, the only thing you can’t borrow for is your retirement.

Helping your children develop sound financial habits is one of the best things that you can do for them. When we were growing up, most of us had jobs in high school, or earlier. We mowed lawns, delivered papers, babysat and often were paid in cash. I remember clearly regularly counting my cash to save up for new bike. Working for a major purchase and realizing how long it took to earn enough to pay for the coveted item helped me to understand the relationship between work, income and savings. Millenials largely live a cashless existence. They pay via 1-click on Amazon, use Paypal, Smartphone apps, debit cards, but cash? Not likely. The downside of the digital economy is that it is far too easy to spend money without fully comprehending the relationship between your income and your expenses.

If you are open to having your college graduate move back home, here are a few suggestions to help them learn to earn their financial independence.

1. Establish the expectation that they will pay rent from day one. You can set it on a sliding scale based on their income. As housing in the real world likely will represent 20% to 30% of their gross pay depending on the city, you could set a fixed percentage or a fixed amount. If their pay increases, so too should their rent if it’s been set artificially low.
2. Start a savings account for them but keep it secret. Deposit the rent that you are collecting into the account. When they finally move out, you can give them the money from the account to help pay their security deposit, first month’s rent, etc. This not only will help them get off on the right start, it will demonstrate the real value of saving and you’ll be a real hero, which is never a bad thing.
3. Set a monthly budget for the “extras”. For any other expenses you might be subsidizing (cell phone, car expenses, health insurance), establish how much you’ll pay up front and create a “weaning off” schedule. Target having them be fully on their own within 6 months or a year. Yes, your friends and family cell phone plan might be great and a better deal than they can get elsewhere. However having your adult child pay his or her own bills will help in establishing credit, which they will need later on.

When both parents and adult children are clear on expectations, up front, many of the family tensions that I hear about from parents with adult children living at home quickly fade. As a parent, you want the best for your children and you usually are willing to do anything to avoid seeing them be discouraged, unhappy or struggling. Give them a life skill gift of financial savvy and you’ll both be winners in the long run.