Parents, put limits on the time and money your boomerang kid can use to live at home.
These days, having an adult child live at home is relatively commonplace. As of 2016, 15 percent of 25- to 35-year-olds were living in their parents’ home, according to a 2017 study from Pew Research Center.
For many well-meaning parents, welcoming their adult children home means helping them manage a transition, save money, pay off debt or find a job.
But if the boomerang kid overstays his or her welcome, the return home can be more than just a minor nuisance, experts say. Kids who fail to launch can become a drain on their parents’ finances, delaying Mom and Dad’s plans to downsize, build retirement savings and move forward unburdened into middle age or retirement. “If a kid is going to move back home, that means you’re going to have less money,” says Jayne A. Pearl, co-author of the book “Kids, Wealth and Consequences.”
If you’re anticipating a return home of your adult offspring or are already itching to kick your boomerang kid out of the house, here’s what to know.
Set expectations early. Place limitations on your generosity as soon as possible – ideally, before your boomerang child steps through the door. “If you’re going to give money when you don’t really want to, you can put stipulations on it,” says Jeremy Straub, CEO of financial services firm Coastal Wealth.
For example, savvy parents can limit the time they’ll allow Junior to live at home. After, say, nine months, he needs to have his own apartment. Parents can also require that certain chores be completed and specific job-seeking steps be performed. Savvy parents may also insist that their child help pay part of the mortgage or pitch in on grocery purchases.
Set these limits early, experts say, before your child moves home, so that they don’t appear emotionally driven or punitive. Knowing the limits of your generosity will help your child know when it’s time to move out … and that he can’t stick around forever.
Make it a little uncomfortable. Some kids struggle to leave the nest because their childhood home is too, well, comfortable. To encourage their exit, parents may want to make home a little less cozy.
“You want to give them incentives for leaving,” Pearl says. That doesn’t necessarily mean being a nag or a taskmaster, Pearl says. But make sure they adhere to house rules and submit proof that they’re looking for a job. It’s your house, so you can require a curfew or forbid overnight guests.
You can offer your kids the “carrot or the stick,” Straub says. Using the “stick” involves annoying your kids a little, waking them up early, refusing to clean up after them and making sure they’re acting like adults – not reverting to their childhood routines of sleeping in and playing video games all day once they move home.
Help support your child’s transition. Once your generosity is exhausted, it’s time to require that your child exit the house. But, experts note, you don’t have to do it in a way that will force them to risk their finances by, say, running up a credit card bill or living on the street.
For example, if your child has been paying rent to stay at home, consider saving that money in an account and giving it back to your kid to cover a security deposit and new furniture at their own apartment. Parents can link their kids up with people they know in their chosen industry, practice for job interviews with them and make other moves to help set them up for a successful, independent adulthood.
Don’t let it become a habit. Experts note that allowing your adult children to live at home is often less financially burdensome than, say, paying their rent or writing them a check to pay off their student loan debt. Those oversize financial gifts can bankrupt financially stretched parents.
“I’ve seen folks run out of money in their 80s because they supported their kids,” says Kelly Graves, a certified financial planner and partner at Carroll Financial Associates in Charlotte, North Carolina. But that typically happens when they are gifting large sums of money to their adult children, Graves says, not when they allow them to live at home.
So carefully consider your level of support. Having your kid’s childhood bedroom available is one thing. But don’t let your financial generosity escalate. You want to foster independence, not create an adult child who requests tens of thousands of your retirement dollars down the road.