Managing Your Finances When Boomerang Kids Return

Retirement

Managing Your Finances When Boomerang Kids Return

Posted by Infinite Wealth Advisors, LLC
5 years ago | May 11, 2015

Multi Generation Family Sitting On Sofa With Newborn Baby

Multi Generation Family Sitting On Sofa With Newborn Baby

The term “boomerang kids” has recently been coined in response to the trend of post-college adult children returning to the family home. In this economy, many young adults experience trouble landing a job that pays a living wage while allowing them to repay college loans. In many families, the solution is a return to multi-generational living. While most parents welcome their children home and are happy to help them through a rough patch, it can cause a rough patch for the parents if they aren’t careful!

If you have your home boomerang child rejoining the nest, follow these guidelines to prevent harm to your own finances.

Anticipate. With 36 percent of the 18-to-31 group living with their parents, it’s a wise idea to anticipate a return at some point. If you downsize to a smaller home, make sure you have at least one spare bedroom.

Be clear about your own financial situation. Don’t allow your kids to view you as a walking, talking ATM. Let them know you are saving for retirement, trying to pay off your mortgage, and have other major financial responsibilities. You child should gain a clear understanding that this new arrangement is more similar to having an adult roommate, and not a reboot of their childhood.

Come to a firm agreement. Would you ever want to leave a place that provided free rent? It’s not a good idea to allow an adult child to move back in, without a deadline or any expectations for financial contribution. Before allowing your adult child to move in, establish some guidelines for financial contribution and a deadline for moving out. You will help your child learn budgeting skills and responsibility, and your own bank account balance won’t suffer in the meantime.

Put yourself first. Your child is an adult, and can work an extra job if they need to. Don’t prioritize their needs over your own. This is not the time to skimp on retirement savings or paying down debt. If your child makes a poor financial decision, let them deal with the consequences. If you continue to pay for their mistakes, then you put your own financial situation in jeopardy.

Multi-generational living can be a rewarding experience for everyone involved. But if you fail to set clear boundaries, you can expect the situation to become strained. Consider putting all of your agreements in writing, and don’t hesitate to review the “contract” if someone begins to neglect their end of the deal.

Have questions? Need assistance?

Use the form below to schedule an appointment.

Call 877-281-8282 or email kevin@infinitewealthadvisors.com to speak with an agent.