She seems very comfortable living with us and shows no signs of wanting to live on her own. She makes good money at her job but at the end of the month she would get a letter from the bank for insufiecent funds. We do have her pay us rent for the month. The only other bills she has are car insurance and cell phone. I know she makes good money to live on her own. We put the food on the table for her and our grandson. We live in a big house and would like to down size our home but with the kids still in our home it makes it hard to down size.

Let her know of your plans to downsize. Give a specific time frame that you are looking at. Then mention to her that it should give her plenty of time to find a place for her and your grandson, and that you would love to go with her to check out different places that are close by. If you are able to hold onto the rent money she gives you, or at least part of it, you can give it back when she finds a place to use as a deposit and first month's rent.

In addition to the above, ask her if she needs help with a budget ?

You have the perfect excuse- you are going to put the house up for sale, and downsize.

She is 29, has a good job, and a nine year old son to raise. That she doesn't manage her money well, is not because she doesn't have enough of it. She chooses no to.

I agree with Chuck, that you might want to offer help to organize a budget, if she wants to.

And Doula's suggestion of setting aside rent money for her first and last, is a good, and very generous gesture.