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Boomerang kids don't have to be a financial drain
Thursday, 22 January 2009 07:55

Establishing Ground Rules Makes all the Difference

During my usual research on Kids and Money related issues, I came across a very interesting article that reflects a large number of families here in the Bahamas. I decided to share a slightly abridged version of the article as I truly believe this information could not have been presented any better. It is something that all parents who find themselves in this position should consider doing.

A few years ago, a great deal of publicity focused on the difficulties parents face in adjusting to life after their children leave home. These days, however, the situation is reversed. Empty-nest syndrome has given way to the trend of "boomerang kids," who are moving back in with Mom and/or Dad at an unprecedented rate. This trend affects more than daily routines. The financial burden of children moving back home can be significant. However, "boomerang kids" don't have to cause money-related turmoil. According to William L. Anthes, Ph.D., president and CEO of the National Endowment for Financial Education® (NEFE®), some advance discussion and planning can help ensure a positive experience for the entire household.

While every family's situation is unique, most adult children who move in with their parents share similar traits. Boomerang kids have been on their own in the world for a period of time, and they have elected to move home temporarily. Their reasons for returning home run the gamut from job loss to divorce—but financial problems usually are the underlying motivation. According to an article in the March-April issue of AARP Magazine, the majority of returning adult children are males. The article also noted that they may stay with their parents for a few months to several years. During this time, some adult children may allow their parents to carry the burden for their living expenses and housework.

How to Establish Limits
"Most parents will do anything in their power to help their children through a difficult time. But they shouldn't do so to the detriment of their own financial well-being. Parents need to focus on saving and planning for their upcoming retirement, and they should not lose sight of this goal," Anthes says. However, taking a deliberate approach to the situation by establishing a plan that sets limits may dispel potential problems and help ensure a smooth running home.

Set the ground rules
Begin by discussing your fundamental requirements with your boomerang kid. "Let your child know that things will be different in your home this time around," Anthes says. "Having been independent, your child is now an adult and should have all the responsibilities that go along with that status. Unless you make this clear, your son or daughter is likely to fall back into the comfortable role of the nurtured child." Anthes encourages parents to come up with a list of basic ground rules. "These should be non-negotiable terms for living in the family home. Include specific standards for things like noise, smoking, alcohol and visitors.. Use common sense in outlining all the points that could cause conflict later. As you make them clear to your child, also emphasize the
consequences for breaking these rules."

In most cases the ground rules should include a tentative limit on the length of time the child may remain in the home. "Some situations may require an open-ended or extended stay, but such considerations are rare. Usually, it is best to clarify how long the arrangement will last," Anthes says.

Negotiate the assignment of specific responsibilities
"Schedule a meeting to discuss your expectations," Anthes advises. "While parents and their boomerang kids jointly should agree on their respective roles in the household, parents need to take the lead and put their own interests first." He encourages parents to focus on two categories: financial contributions and household chores.

Financial Contributions
Although circumstances will vary with each family, a discussion of finances may include the following topics:
• Rent—Set a reasonable amount for rent and establish a date when the payment is due every month. While this money can be extremely helpful to you in supporting your boomerang kid, you may decide you don't need it. In this case, consider saving it for your child. He or she may have chosen to move home and save money in the hopes of meeting a specific goal, such as paying tuition or buying a house. This money could be used to help your child meet that goal.
• Telephone—The returning child should cover the costs of his or her phone service, whether it involves a second phone line and answering machine or a cell phone.
• Lifestyle Choices—If the adult child requests additional household amenities, such as cable television or Internet access, he or she should pay the full cost unless other members of the household also use the services; in these cases, divide costs among the users.
• Utilities—Agree on a percentage of utilities to be paid every month.
• Transportation—The child should cover his or her transportation costs, whether they involve a car payment and insurance or public transportation. In cases where the family car is the only option, the child should contribute to the cost of maintenance, fuel and insurance.
• Food—Negotiate a reasonable amount to help cover the cost of food every month, or request payment after every shopping trip.

Household Chores
Returning children also should help maintain order around the house, according to Anthes. Parents may choose to assign their child general household chores. They might consider recruiting boomerang kids to perform extra jobs around the house in lieu of cash payments. Possible options include:

• Cleaning—Parents may make specific assignments, such as the kitchen or bathroom, in addition to the child's bedroom. Don't forget washing the dishes and
taking out the garbage.
• Errands—In many cases, the child can provide a valuable service by taking care of daily tasks, such as picking up dry cleaning, driving family members to appointments, washing the family car or making special trips to a hardware or grocery store.
• Yard Work—Boomerang kids certainly should do their part by mowing the lawn, raking leaves and watering. Some parents may choose to assign their child more labor-intensive tasks as a form of "paying back" his or her time living at the family home.
• Laundry—The returning child may be expected to handle his or her own laundry, or the family can choose to rotate responsibility for the entire chore.
• Cooking—Depending on the child's culinary skills, he or she may want to assume some responsibility for cooking meals for the family. Otherwise, the child may opt to increase involvement in other household projects or contribute additional money.
• Pet Care—Feeding, grooming and walking pets are necessary and time-consuming tasks that may be handled by the returning child.
• General Maintenance—Maybe your home needs a paint job, or you need help with remodeling or simple repairs. Maybe you just want to rearrange the furniture. The boomerang child may be able to help..

After you and your child have established both the ground rules and the financial and household expectations, put all responsibilities in writing. This way everyone is aware of the standards and, if disagreements arise, families can refer back to their initial agreement. "Whatever standards you set concerning financial responsibilities and household chores, stick to them," Anthes says. "You should not sacrifice your own time and money for the sake of your child if he or she is not willing to live up to the bargain. If your child refuses to contribute as you see fit, ask your boomerang kid to find another living arrangement."

What Makes a Happy Home?
"Boomerang kids, while they bring with them the potential for emotional and financial stress, also can have a positive impact on the household," Anthes says.. "Many parents enjoy the company of their adult children and are pleased to have them back, especially if they take on extra responsibilities."

In addition, having your child living with you again gives you a unique opportunity to demonstrate positive financial behavior. If your child moved home because he or she was struggling with money, perhaps credit card debt, you can help—not by paying the debt, but by demonstrating how you handle your own finances.

"Some children might not have developed positive money-management skills the first time around," Anthes says. "Now, you have a second chance to show your child the value of sound financial habits. Work with him or her to develop those habits, and do what you can to help your child improve on them."

Anthes stresses that such financial guidance will help boomerang kids establish their independence and move on. "Parents need the freedom to prepare for their future and to modify their lifestyle to suit their needs as they age. Concurrently, young adults need to carve out their lives and lay the groundwork for their own future. Both suffer if the dependence goes on too long.

"Families are amazingly resilient," Anthes says. "They pull together to provide emotional and financial support when it is needed.. Boomerang kids may need a little or a lot of help, depending on their situation, but the best approach in virtually all cases is to set standards and establish a plan that moves them back to independence as soon as possible."

Produced by the National Endowment for Financial Education.

Keshelle Kerr is the owner of Creative Wealth Bahamas, a company whose mission is to put kids, teens and young adults on the road to financial independence. Send your comments and questions to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . For a list of programs, visit her website at For a customized program or talk for your special event, call her at 341-5860.