Skip To Main Content

Unlocking financial security: The advantages of multigenerational living.

In recent decades, the composition of American households has undergone a significant transformation, with a substantial increase in the number of multigenerational households. According to Open Access Government, in 2020, the onset of COVID-19 caused a rise of nearly half a million children living in “doubled-up” households alongside adults beyond their parents. The majority lived in multigenerational living arrangements, predominantly with grandparents.

Today, it’s not just the pandemic causing this shift. A recent Pew Research study found a quarter of U.S. adults ages 25–34 live in a multigenerational family household in 2021, up from 9% in 1971, with financial stability being a key motivator for this trend. Multigenerational living has increased among all age groups the past five decades. There are myriad reasons for this shift — among them are rising housing costs, student loan debt and economic volatility — and this type of living situation offers some appealing benefits, including enhancing financial security.

The perks of shared household expenses.

The pandemic ushered in a surge of multigenerational living arrangements due to economic needs taking precedence, a trend that continues today. Living in a multigenerational household allows for significant cost-sharing opportunities. Shared living spaces, utilities, groceries and other household expenses can be divided among family members, resulting in substantial cost savings for everyone involved. This shared financial responsibility can alleviate the financial burden on individuals, enabling them to redirect their funds toward savings, investments, or paying down debts.

One of the most significant monthly expenses for any individual or family is housing. Multigenerational living often enables families to collectively contribute to mortgage payments, rent, property taxes and maintenance costs. By consolidating these expenses, individuals can allocate a smaller portion of their income to housing, freeing up funds for other essential needs and financial goals.

Pooling resources in a multigenerational household provides an opportunity to benefit from economies of scale. Buying in bulk, sharing family plans for services like internet or phone, and jointly negotiating better deals can result in lower costs per person. This collective purchasing power translates into substantial savings over time, promoting a more frugal and efficient financial lifestyle.

Shared childcare and eldercare costs.

Families in multigenerational households can coordinate and share responsibilities for childcare and elder care. This support system reduces the need for external childcare services or expensive elder care facilities, resulting in considerable financial savings. Moreover, it allows family members to balance work and caregiving responsibilities more effectively, potentially boosting their income and career opportunities.

Pooling investment resources.

Multigenerational living can enable families to pool their financial resources for investments such as real estate, stocks, or other ventures. This collective approach to investments increases the overall investment capacity and potential returns. By harnessing the combined financial strength of family members, individuals can build a more robust investment portfolio and work toward long-term financial growth.

The future of housing situations?

Multigenerational living offers a range of financial benefits that can significantly enhance financial security for all involved. As the cost of living continues to rise, leveraging the advantages of shared expenses, cost-sharing and financial collaboration within a family setting can be a strategic approach to achieving financial stability and prosperity. By embracing this arrangement, families can navigate the modern economic landscape more effectively and secure a brighter financial future. And, at the end of the day, family ties will continue to provide a resilient safety net during challenging economic times. Talk to your trusted Commerce Bank advisor to learn more.


To view or print a PDF file, Adobe® Reader® 9.5 or above is recommended. Download the latest version.