Boomerang Kids Return
Filed under: Retirement
Once your kids have grown up and left the nest, you might assume they’re on their own for the long haul. But due to recent economic conditions, we’re seeing a growing trend in which young adults return to live at home with their parents for a few years. This allows them to pay down college loans while building a career in their chosen field. It’s a great deal for the so-called “boomerang kids”, but many parents have found themselves experiencing financial trouble as a result of this new living arrangement.
Those of you who are getting ready for retirement, or have already retired, have your own financial priorities at stake. So before you allow adult children to move back into the family home, keep these guidelines in mind.
Anticipate it. At current time, 36 percent of the 18 to 31 age group is living at home with their parents! Knowing the likelihood that at least one of your kids may need to move in with you at some point, don’t rush to downsize to a one-bedroom home. Otherwise you may find yourself deciding to move once again.
Lay your cards on the table. Make sure your children understand that this situation is not a reboot of their childhood. You are all adults and must take care of your own financial responsibilities. This is also a good opportunity to explain the importance of your own generation’s financial priorities, such as saving for retirement and getting out of debt. You can set a good example while also setting limits.
Agree on an end point to the arrangement. Make it clear that this living arrangement has an expiration date. Most people wouldn’t want to leave a place that provides free rent, so you must provide the motivation that your young adult needs.
Make your expectations clear. Establish parameters for your child’s financial contribution toward the household. Will they be expected to pay for their share of utilities? What about their own food? This is a perfect time to help him or her learn budgeting skills and responsibility before they re-enter “the real world”. Not to mention, you cannot allow this arrangement to cause harm to your own finances.
Keep your own priorities in order. It’s tempting to bail your child out of financial troubles, but remember that building your retirement savings and paying down your own debt is important at this time in your life. Allow your child to deal with the consequences of their own financial decisions, so that you don’t put yourself in jeopardy.
This living arrangement can be beneficial for everyone involved, and you might even enjoy it! But setting clear boundaries is the key to preventing financial damage and strained family relationships. You might even wish to put the above agreements in writing, so that everyone is clear on their limits and responsibilities.