Young Adults – Boomerang Time

Thrivent conducted their second annual “Boomerang Kids Survey.” This is the phrase used when adult children move back home with their parents. The study shows 41% of parents have an adult child in their home.

Reasons provided include:

• Increasing rent and home prices (35%)
• Need for additional financial support (20%)
• Job loss (13%)

Having your adult child at home is an opportunity to discuss good financial management but parents seem uncomfortable with that idea.

• 75% are not discussing money management
• 80% haven’t set any financial expectations
• 92% don’t have a timeline for moving out

The impact on the parents’ finances is significant. Parents’ savings have been compromised to the tune of 51% and 23% of parents are having difficulty paying off debt incurred supporting an adult child.

This is not a new phenomenon. During the Great Recession, three-in-ten young adults (ages 25-34) moved back home (Pew Research March 2012).

It can be a balancing act to help children get off on the right foot without inhibiting your own circumstances. Some planners worry they are “enabling” their children. There isn’t a one size fits all solution. Some suggestion include:

• Having your child contribute to the groceries
• Pay something for rent
• Pay something for utilities

Realistically, you could take almost any expense(s) impacted by having more people in your home to decide who everyone can contribute to a healthy outcome.