How to Protect Your Own Finances with Boomerang Kids
Nowadays, it’s not uncommon for adult children to live with their parents. In fact, data from the Pew Research Center shows that 25% of 25- to 34-year-olds lived in a multigenerational family household in 2021. This group of adults is referred to as “boomerang kids,” because, as the name suggests, they go into the world and come right back.
There may come a point when your adult son or daughter chooses to return home. While adapting to an empty nest can be hard, having your child return home can pose its own set of challenges. If you have a boomerang kid, consider these tips to protect your finances and keep a happy household.
Think Before Welcoming Them Back Home
Everyone’s financial situation is unique. For some, having a grown child back at home is ideal. For others, it may not be the best option. Before welcoming your child into your household, carefully consider the decision. It may be wise to work with a financial professional to go over your long-term financial goals and retirement plan. Review your budget to evaluate your current financial situation. Then, factor in the costs that might arise from having an extra member of the household.
With boomerang kids, it’s crucial to set ground rules up-front. After you’ve agreed to have them back, work together to establish how the arrangement can be successful for everyone. Decide if your boomerang kid will pay rent or contribute to household expenses. Apart from finances, set clear expectations for household responsibilities like cleaning, cooking, and laundry. Let them know if they’ll need to assist with errands, yard work, pet care, or other household needs. Simply put, be firm and direct about what the boomerang child needs to contribute.
Put Details in Writing
After you’ve talked through expectations with your boomerang kid, put the plan into writing. Having a written set of expectations can help ensure everyone is on the same page. It helps keep your boomerang kid accountable. When creating the document, list all your expectations, rules, and consequences. It’s important to be as specific as possible so that your boomerang kid has a clear understanding of what’s acceptable while living under your roof.
While your boomerang kid is living at home, keep a close eye on your expenses. You may not be aware of how much you’re spending on additional costs like groceries and other household items. If you become uneasy about any extra expenses you’re incurring, consider adjusting the plan. Sit down with your boomerang kid to figure out if they can contribute more money. Whether it’s paying rent or pitching in more for groceries, determine how they can help. It’s imperative to prioritize your own financial goals and not let them fall by the wayside.
Have the Child Consider a Long-Term Plan
It’s important to have a conversation about how long your boomerang kid intends to live at home. Talk with them about their long-term financial goals and help them set a realistic move-out date. Will they move out as soon as they land a job? Or will they leave once they have a specific amount of money saved? Set aside time to walk through their finances with them and develop a savings plan. Schedule regular sit-downs to ensure they’re on track toward their goals. All in all, a long-term plan can prevent your child from getting too comfortable. Even more importantly, it can motivate your boomerang kid to work toward self-sufficiency.
Budgeting and saving are key components of any sound financial plan. Whether you’re helping your boomerang kid find their footing or working toward your own financial goals, careful financial planning can make a big impact. Learn more ways to better position yourself for financial independence by visiting the Spending and Budgeting section of our website.