5 Tips for Helping Boomerang Kids Without Bankrupting Yourself

If you have a boomerang kid in your family, don’t despair. You’re in good company.

The U.S. Census Bureau estimated that last year there were 6 million adults ages 25 to 34 living at home, according to the American Institute of CPAs. That’s 18.2 percent of all men in that age bracket (up from 14 percent in 2005) and 12.1 percent of women (up from 8 percent in 2005). College debt, a slow job market and high housing prices are some of the widely reported reasons for the trend. What’s not widely reported is that the boomerang syndrome can be a positive.

“It’s not a negative,” said Leslie Tayne, of Tayne Law Group, New York City. “The connotation is that moving back home is awful, but it could be a sign of financial responsibility. There’s nothing wrong with people moving home as long as everyone is on the same page with a budget, goals and deadlines. It’s a great way to pay off debt and prepare for graduate school or an independent life.”

Consider these tips for setting up a positive boomerang relationship:

1. Don’t wing it

A good boomerang situation doesn’t happen automatically. Children returning to their parental home can sink themselves and their parents if they don’t plan their finances.

“If you go in blindly that can be destructive,” Tayne says.

But a good plan will protect the parents’ finances and can help prepare the child for financial independence.

Parents and child should have a candid discussion before the child moves back to the family home. They should discuss why the child will move back, how long they will stay, what goals they will work toward, and what financial contribution they will provide to the household.

“Parents have lives, too, and they need to understand how a child moving home will impact them,” said Tayne. “Approach the discussion as you would if a friend or any other adult was moving in with you.”

To prevent misunderstandings down the road, write down the agreement and make copies for everyone involved.

2. Set financial expectations

Tayne and other financial experts say adult children living at home should financially contribute to the household. It is not unreasonable to have a boomerang kid pay rent and a portion of other regular expenses, such as food, supplies and utilities. Heritage Credit Union notes:

It could help you avoid overspending — and help your kids be prepared to expect these expenses when they move out on their own. If you can afford it, consider setting aside some of your kids’ rent payment to return to them when they’re ready to move, or to help them pay off debt.

3. Keep an eye on the young adult’s goals

It’s important to ensure that the young adult who moved home is working toward the goals that were set before they returned. Parents should ask for updates on progress. Tayne noted that many clients seem caught by surprise at their children’s actions. “I always encourage parents to have conversations with their adult children,” she said. “Write down the talking points and then have the conversation over a nice family dinner or in another nonstressful environment.”

4. Guard your own goals

Don’t lose track of your retirement savings and financial security in the effort to support adult children. To do so is bad for you and for your relationships. That’s why it’s important to set goals and limits. Don’t pay for items your children can’t afford and be cautious about lending money to them, warns Heritage Credit Union:

If you loaned a child money that he or she can’t repay, it could strain your relationship. Also think very carefully before agreeing to cosign a loan. While it can help your son or daughter establish credit, cosigning could put you on the hook for a loan your child isn’t ready to take on.

5. Don’t change your life to suit your children

It’s important for parents to remember that they are entitled to their own lives. Set limits on the number of guests allowed at certain times. Require adult children to pitch in on house upkeep and other chores. Maintaining your rules and schedule in your home makes sense and it helps adult children remain invested in their eventual independence.

Have you been or have you hosted a boomerang kid? Share with us in comments below or on our Facebook page.