Boomerang generation is a term used to describe the millions of young adults who, after graduating from high school or college and living on their own, return to the family home to live with their parents.
This ongoing trend occurs for a variety of reasons. Some young adults make the move simply because they want to, but most often it’s due to financial difficulties caused by things like job loss, a lack of financial skills, a relationship breakup, an inability to secure a high-paying job, increased debt, a lack of affordable housing, and costly student loan debt.
Recent studies suggest that young adults who have not completed college specifically are at an increased risk to boomerang back into the family home. So while college completion can lower their boomerang risk, high cost tuition and student loan debt can raise it again.
Sharing household expenses with parents provides adult children an opportunity to save money for their future while allowing parents an alternative to providing supplemental income to their children.
Reentering the home requires communication though and a great deal of thoughtful planning. It also requires young adults (and their parents) to change and adapt to new roles in the household as adults- no longer as children.
With the ultimate goal of financial independence, a predetermined plan should take into consideration the following:
By how much will household expenses increase with another occupant?
Where will the adult child be employed?
How much rent will the adult child be expected to pay?
How much will he put away into savings?
What rules might be implemented regarding risky social behaviors?
Who in the home will be responsible for which household tasks?
Will the adult child require a financial adviser, a credit counselor, a psychiatrist, or any other professional services?
How will the individuals within the home maintain their privacy?
Is this arrangement short or long term- what is the move out goal date?
Although these conversations may seem awkward or uncomfortable, communication is critical for the arrangement to be successful. Effective communication and planning will establish the boundaries and expectations for everyone involved so futures can be planned accordingly. Communication and planning can preserve the relationship between parent and child and pave the way for an adult child’s future financial success.