Last week I responded to a couple of parents who asked about setting up a contract with adult children who were moving back home. This week I'd like to offer some advice on how both of you should decide on the agreement's terms.

To make your young adult's return both less stressful and temporary, agree on a plan that addresses three key points:

Length of stay. It needn't be a brief interlude, but it shouldn't be forever. If your child is at home while looking for a job, give him or her, say, six months to find one, with an option to renew. For a graduate student, a year or two makes sense.

If your child's stay turns out to be open-ended, you're more likely to resent the drain on your financial resources. And hanging around too long simply postpones the inevitable day when kids have to leave for good.

Payment. Kids aren't likely to volunteer to pay room and board, so don't be shy about bringing up the subject. They probably won't be able to afford market rent, but a nominal amount each month is reasonable.

One family didn't ask for rent while their kids looked for work, but charged 10% of their salary once they were employed. If you don't need the money, put it aside for the kids to pay off debt or save for a security deposit on an apartment.

If they're earning money, young adults should also be paying their own phone bills and contributing to the cost of food, cable TV and other household expenses. Kids with no income can provide payment-in-kind by cooking meals or taking over the yard work.

House rules. Even though your child isn't 15 any more, it's still your house. You have a right to ask young adults to call if they're going to be really late (or not coming home at all). Establish your own policy on smoking and overnight guests. Will the kids be expected to show up for dinner every night -- or even cook it once in a while?

One of the best ways to make sure your children don't settle in for the long haul is not to make things too comfortable. "Kids want freedom," says Jeffrey Arnett, a developmental psychologist at the University of Maryland. "Nothing puts a damper on having a sex life more than moving back home with Mom and Dad."

MORE: Kiplinger.com | Spending Wisely | Column

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