Five Tips for Living Peacefully with "Boomerang Kids"

Because of the recent recession and continuing economic weakness, more and more adult children are still living with their parents or have moved back in with them. In fact, the percentage of 20 to 34-year-olds who live with their parents jumped from 17 percent in 1980 to 24 percent during the recession, according to a USA 2010 survey. The rise was greatest for adults under 25, with 43 percent living at home.

How can parents navigate the challenges, financial and otherwise, of living with these “boomerang kids”? The California Society of CPAs offers some smart ideas.

Accentuate the Positives

It may be tempting to see the arrangement as a failure to leave the nest, but it’s better to focus on the positives. Financial benefits to the child include the chance to save up for the future, switch to a more rewarding job, or pay off college loans or other debts sooner. It can also lower costs for the parents if the child pays rent or chips in on expenses. Looking at the upside can help decrease stress levels.

Consider a Contract

The living situation will work best if both parents and child have a complete understanding of what the other expects. Parents should determine up front exactly how much the child will contribute to household costs and what their responsibilities around the house will be. For example, will they be expected to pay rent? Help out with utilities costs? Will they pay for their own food and make their own meals or eat with their parents? Who will care for—and pay expenses for—the adult child’s pets or children?

These are the kinds of questions that should be addressed early on. Parents may even consider putting together an informal contract that spells out these and other appropriate details.

Determine Your Level of Support

Understanding expectations is particularly important if the adult child is not working. In this case, will the parents pay his or her expenses and provide pocket money? If they will, should it be considered a gift or a loan? How long are the parents willing to help out financially this way? How much time do the parents expect their child to spend on job searches or in jobs that aren’t in the child’s chosen field but that do bring in cash?

These can be uncomfortable issues to raise, but addressing them will contribute to a better living situation. Once rules have been established for the level of support, all parties should make sure they stick to them.

Respect Each Other

Parents of adult children must understand that even though their children are back under the family roof, they are adults who must be allowed their own autonomy. At the same time, the adult children have to acknowledge that their parents have interests and responsibilities beyond their role as parents and respect their needs without taking advantage of them. Be prepared for an adjustment period in which both sides learn to see each other as independent adults.

Think about the Future

Will the arrangement last indefinitely or will it end at a certain point; for example, when the adult child finishes further education that will qualify him or her for a new job or when the adult child gets a raise to a certain income level?

No matter what the answer, it’s a good idea to discuss short and long-term plans. If you don’t, it could lead to resentment and misunderstandings down the road.

Your Local CPA Can Help

Seeking advice on concerns about boomerang kids or any other financial issues affecting your family? Turn to your local CPA. He or she has the expertise to help you resolve all your financial concerns.

The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program.