Boomerang Kids: Preparing for when adult children return home

Today more than ever, parents are finding their adult children moving back home.  These “boomerang kids” as they are commonly referred may be moving in for a variety of reasons. Many are recent college graduates who are having trouble finding a decent job. Others, however, may be older children who just went through a recent divorce or job loss. Whatever the reason, this new living situation can cause emotional and financial stress on families. But when you find your boomerang kid standing on your doorstep with suitcase in hand, there are some steps you can take to lessen these stressors.
Communicate
First off, it is important that you treat your child like the adult that he or she has become. Let your child know that he or she is not alone and that you will be there for whatever type of support is needed. As both parent and child embark on a new living arrangement it is critical that lines of communication are open. Discuss expectations: both yours and theirs.    
“Talking about the move back home is an opportunity to share the changes you’ve undergone since your child moved out,” says Ruth Nemzoff, author of Don’t Bite Your Tongue: How to Foster Rewarding Relationships With Your Adult Child. “It’s also an opportunity to learn about the changes your child has undergone.
Maintaining an open dialogue from the beginning will lessen the chance of misunderstandings.
Set ground rules
It’s important from the outset to establish some house rules. Let your child know what your feelings are on smoking, drinking, house guests, etc. It is also a good idea to establish a time frame. How long will he or she be living with you? It’s okay to tell your child that he or she can stay as long as he or she searches for a job or saves for a down payment on a house.
Avoid being an enabler
One of the hardest parts of being a parent is knowing when you are contributing to the problem by being too financially accommodating. You may find yourself stuck between wanting to take care of the child you love, but also wanting to teach them how to take care of themselves. According to a survey by Ameriprise Financial, nearly 70% of baby-boomers said they have helped an adult child with college loans and more than 50% said they have helped with an auto loan or allowed adult children to live at home rent-free.
Nemzoff says that if you are going to help your child financially, he or she should be diligently looking for a job. “If your child is just hanging around, you may want to say ‘no’ more often.”
Share household costs and chores
If your child is living at home, he or she should be helping with the household chores. This is something that should be established from the outset. And if your child has a job, household expenses should also be shared. Additionally, it is a good idea to charge your child some degree of rent. This will not only help you cover additional costs, but it gets them used to having bills again.
For yourself, this is probably a good time to re-examine your household budget or create a new one. It will be easier to keep track of additional expenses and find areas to save money.
Handling money requests
If you don’t need your child’s rent money, think about putting some or all of it aside into a savings account. The money can be tapped later if your child asks you for money or you can put it towards your retirement. But it is generally not a good idea to lend money without first assessing your own financial situation. If your child does ask for money, take the time to plan where this money will come from, and talk with your child. Discuss if the money is a gift or a loan. If it is a loan, how soon are you expecting it to be paid back. This again emphasizes the importance of open communication.
Encourage your child to start saving
Now is a good time to help your child build wealth and focus on the future. Not only are you setting goals together about how long he or she will stay, but you should also be discussing his or her financial future. If your child is working, encourage him or her to participate in their company’s 401(k). If the employer doesn’t offer a retirement plan, talk to your child about saving in a Traditional IRA or Roth IRA.
One of the keys to this transitional period is helping your child get some direction. Whatever the circumstance, when an adult child moves back home, they often don’t have that direction. You can help with that. The other important factor is that the new arrangement doesn’t put too much stress on you, emotionally or financially. Remember, you are family, and you are in this together to make sure your boomerang kid hasn’t landed back home for good.
At RNP Advisory Services we work closely with each of our clients to meet the individual needs that are specific to them. If you’d like to discus your investments, retirement, or changing financial situation, please visit is us at www.rnpadvisory.com or call us at (408) 779-0699.
RNP Advisory Services is a Registered Investment Advisor.Securities offered through Foothill Securities, Inc. – Member FINRA/SIPC, an unaffiliated company.