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Adult Children Moving Back Home: Don't Let "Boomerang Kids" Derail Your Goals

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. Boomerang Kids can be a mixed blessing for parents, both emotionally and financially. According to a recent survey by the Pew Research Center finds that 13% of parents with grown children say one of their adult sons or daughters has moved back home in the past year.1

The trend is cyclical. Especially during tough economic times, adult children head for home. According to Monster's 2009 Annual Entry-Level Job Outlook, about 40 percent of 2008 grads still live with their parents. Moreover, 42 percent of the 2006 graduates surveyed said they're still living at home.2

The reasons are many, the first being economics. While the recession has touched Americans of all ages, it has been particularly hard on young adults. According to the Bureau of Labor Statistics, in October 2009, 15.6% of 20-to-24-year-olds were unemployed vs. 8.7% for people over 25.3

That sent a lot of young folks back home. Plus, there is the matter of debt, especially college loans. For many 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, to recover from a divorce or an illness, or just because they cannot afford their parents' lifestyle living on their own.

Caution: Parents are often happy to help out, both emotionally and financially. As a result, the arrangement often works to everyone's satisfaction. However, there are risks, especially for the parents. These include family tension and misunderstandings, but also money.

The return to the nest can become a financial burden that can derail the parents' plans and jeopardize their financial future, especially their retirement, as they try to do too much for their children. For example, if parents pick up a daughter's college loan, that payment is money not going toward their own retirement savings, very often at a time when the parents need to be stashing cash at an accelerated pace to meet retirement needs.

Success Factors
Studies show that the return to the nest works best when parents:

  • Initiate a serious discussion - Early on to ensure that you and your child have the same expectations about the living arrangement. Define why your child has decided to live at home: to start a career and save money, prepare for graduate school or take a break from everything?
  • Set clear expectations - Talk about your child's obligations regarding expenses and household chores. Discuss whether she or he can have dates over for dinner or even to spend the night. If your child plans to spend the night out, should he/she call home first? By setting and enforcing expectations, parents help their children learn the skills they need to live independently.
  • Set a time limit - If your ultimate goal for your child is independence, set a limit for how long she or he can live in your house. You can adjust that deadline later if desired. Experts say it's best for everyone to be on the same page in order to avoid the resentment that might arise from vastly disparate assumptions.
  • Charge Rent - For some parents, the mere mention of charging rent to a family member draws an incredulous reaction: "Are you serious? But I'd do anything for my kids!" But for other parents, charging rent, even a minimal amount, helps prepare the boomerang for living independently and helps parents keep up with home finances.
  • Keep Promises - If parents and adult children hold to their agreements and continue to respect one another, they won't encounter many problems. Resentment can arise when either parents or children are not doing what they've agreed upon. If things start to unravel, have a family meeting to discuss expectations and boundaries.

In almost all cases, the cohabitation arrangement will end eventually. Until it does, insist that your child carry her or his own weight around the house, and teach her or him the skills they'll need to live on their own.4

Finally when it comes to debt and helping your children out financially remember these three key points:

  1. 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.
  2. 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.
  3. Stay Organized: Having your children return home can be stressful. One way to help manage stress and anxiety is to stay organized. When it comes to your finances, few people have time to file all their paperwork. And yet it's important to know where you can find your life insurance policy or will should an emergency arise.

New York Life has a financial checklist and filing system that not only helps you organize what you have - it helps you identify what you may need down the road. It's called the LifeFolio System: Your Lifetime Financial Organizer. At no charge to you, a New York Life agent - professionally trained and experienced - can help you get on the road to financial organization and also assist you in analyzing your needs and recommending appropriate solutions through insurance and financial products and concepts. Request a no obligation review with a New York Life agent today.

Having your children return to the safety net of your 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. Your role is to guide them. Good luck.

1 Recession Brings Many Young People Back to the Nest: Home for the Holidays…And Every other Day, Pew Research Center, November 24, 2009
2Live With Your Parents After Graduation? by Peter Vogt
3 US Department of Labor, Bureau of Labor Statistics, The Employment Situation, October 2009
4 When a Recent Graduate Moves Back Home: Survival Tips for Parents, June 13, 2007, by Lisette Hilton, Revolution Health Group,

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At no charge to you, a New York Life Agent — professionally trained and experienced — can help you analyze your needs and recommend appropriate solutions through insurance and financial products and concepts. Request a no-obligation review with a New York Life Agent.

New York Life Insurance and Annuity Company does not provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions.

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Adult Children Moving Back Home: Don't Let "Boomerang Kids" Derail Your Goals

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