Boomerang Kids: An Unexpected Return and Expense

Parents have a number of expenses they think of when it comes to their children. Food, clothing, toys, doctor’s visits, vacations, books, school supplies, field trips…all costs that relate what it means to be a kid.

There is one child-related expense that man parents never anticipated, an expense that comes as a surprise to the home and to the savings account: boomerang kids.

Most parents have an expectation of having an “empty nest” when their children leave for college and an adult life on their own. What seems to be taking hold is what has been referred to as a “cluttered nest” or a “crowded nest” when children return home to live with their parents. The return to the home (the boomerang) can happen for a variety of reasons, usually financial.

The Run Down

• Have the money talk. If your adult child needs to return home, make it clear what is expected from him or her and when. Will you be charging them rent? Having them pay part of the utilities? If so, when should they start paying in?
• Know what the expenses will be. There are more expenses this time around than there were when your kids were growing up. Be aware of the extra costs and what you and your son or daughter will need to cover them.
• Make a plan. Talk about your child’s goals, their plan, and create a timeline that you both can work with. Set expectations so there are no surprises when it comes to how much money is available to cover household expenses and as to where that money is coming from.

For example, many boomerang children return because they weren’t able to find a job when graduating from college. According to a recent survey by the Pew Research Center, 24 percent of adults ages 18 to 34 have moved back in with their parents for economic reasons — in many cases as a result of the weak job market and the burden of student loan debt. With the return of an adult child and the associated expenses, what can you do to help save your nest egg and not go into debt?

One tactic to consider is to establish firm ground rules with adult children returning to live at home. It might seem like tough love, but with the current economy, asking your child to pay rent might not be that shocking. This is a personal decision, but it is an important consideration and discussion to have. An adult child’s return to the home means prolonged support or underestimated costs to you. These costs may impact your retirement savings, cause financial hardship, or even bring up conflicts. Hopefully these points will help when it comes to lessening any stress related to an adult child returning home.

Be Clear About Expenses.

It can be far too easy to underestimate the impact a boomerang kid (or any other addition) can have to the household budget. Not only will there be an increase in your utilities, but also in groceries, the phone bill, high-speed Internet, gasoline, car payments, car insurance, clothes, even your adult child’s student loan payments. Asorbing these additional expenses may cause financial hardship or impact your retirement savings. If you decide to ask your child to pay a portion of the household expenses, make it clear what those expenses are and why you are asking for him or her to pay.

Come to an Agreement.

If your child will pay some expenses, what is or isn’t included? Establish what you can afford to pay for and what you expect your child to pay for. Will he or she be contributing rent, utilities or groceries? If so, what amount and when? If you are providing room and board, will your child be paying for his or her discretionary expenses? Are there chores or other maintenance tasks around the home that he or she can perform? Is there an expectation that seeking full-time employment should be a full-time job for them? Are you expecting your child to take on a part-time job while seeking other employment?

Create a TimeLine.

Discuss goals with your child, what their plans are, and what their expected timeline is for either finding a job or saving up enough money to move out. Do they have plans to share an apartment and expenses with a roommate? Will they be returning to college to get a graduate degree to better their chances of finding a job? Setting up a timeline and knowing what their goals are will help both you and your child to establish a financial plan that will return them to independence and you the empty nest you were expecting at this point in your life.