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Thursday, January 17, 2008

Boomerang Kids

They're back. The "Boomerang Kids" — young adults who left to go to college, get married or just strut their independence — are moving back in with mom and dad at a higher rate than in decades. Boomerang Kids can be a mixed blessing for parents, both emotionally and financially.

According to studies, the trend is cyclical. Especially during tough economic times, adult children head for home. Census figures show that 56 percent of men and 43 percent of women ages 18 to 24 today live with one or both parents. Some never left, while an estimated 65 percent of recent college graduates have moved back in with their parents.

The reasons are many, the first being economics. Not only are quite a number of recent college grads still unemployed, many are underemployed, making quite a bit less than they need to pay off college debts and maintain any kind of independent lifestyle. That sent a lot of young folks back home. For as many as 40 percent of recent grads, it made smart economic sense to move back in with their parents – where life is comfortable and rent is either low or nonexistent – while they get their finances in order.

Then, of course, some return for personal reasons (especially the older boomerangers), to recover from a divorce or an illness or a layoff, or just because they cannot afford their parents' lifestyle living on their own. Some come back with their own children – your grandchildren - in tow. That can be especially stressful, if the parents had settled into a comfortable “empty-nester” lifestyle. It’s one thing to be a grandparent and have the grand kids visit, even for a weekend stay; it’s a whole other thing to have them come live with you.

How To Make It Work

Most researchers agree that parents can take steps to create a win–win situation. The first step is to realize that you are now dealing with young adults, not children, and that means that you can work out some logical arrangements with them and not try to treat them the same as you did when they were in high school.

1.Set house rules. Put them in writing. Make it a contract. Remember, it's still your house. While these "tenants" are your children, they still need to understand and agree to your rules for living there.

2. Set a departure date, whether it be three weeks or three months. It may be hard to enforce this suggestion, but you need goals that everyone agrees to at the start. This might be toughest when dealing with a divorced child with children of his/her own in tow.

3. Insist on responsibilities, which may include paying rent and/or payment in kind, such as taking on household chores – doing laundry, making dinner two nights a week, buying groceries. This can often be negotiated. One method is to ask the returning child what he or she believes would be reasonable rent. (This is also the area, when not clearly laid out, that can result in the most misunderstandings, as adult children return to old habits of expecting to be taken care of.) And don’t let your children automatically assume that you’ll provide free child care while they’re out working or looking for work, if they come back with children of their own.

4. Help them restructure debts, rather than simply bail them out. Then teach them how to avoid new debt. One option is to match debt–reduction payments, with the understanding that they put away credit cards and live within their means.

5. Do not sacrifice your own financial future. Decide how much you want and can afford to help. Children tend to think their parents are wealthy, while some parents provide more financial support than they can afford. Remember that your children have decades to build their financial security, while you may be only a few years away from your retirement date. Ironically, if you are not careful, you could end up depending on your children for help in your old age.

Having your darlings return to the safety net of their home – can be wonderful time of family closeness. Setting the tone, laying out the ground rules, and making smart–money financial decisions can help create a positive, supportive environment that is in the best interests of you and your returning family members. It can also be a time of terrible stress, driving otherwise loving families apart. Like everything else in life that is worthwhile, you have to work at making this arrangement work for you and for your child.

In some cases that may also mean changes in your home, either modifications to the old homestead or looking for an entirely new home. Once multiple adults start living in a home the old 1 ½ bath house may not seem as accommodating as it once did, and the lack of “personal space” in the old 1400 Sq Ft ranch will start to show up. Only having one TV viewing room may become a big issue with 2-3 adults viewing preferences to try to satisfy. I can help you find a new place where all of you can be comfortable. Maybe we can even find a duplex, where you can get a temporary solution to your boomerang housing needs and end up with a future income source for your retirement. Give me a call.

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