Making it Work When Boomerang Kids Come Back to the Nest

Opportunity in the job market for young adults has never been so bleak. Since the recession began, the percent of young adults (defined as aged 16 to 24) who are unemployed has almost doubled to about 20 percent. This is the highest for this age group since the Bureau of Labor Statistics began tracking unemployment in 1947.

And with no improvement in the economy on the horizon, more young adults are boomeranging and empty nests are starting to fill back in.

According to the US Census Bureau in 2008, the number of young adults living with their parents was about 15 million. With low pay and the burden of repaying education loans persisting, the latest data is sure to show more young adults being forced back home. And with the number of new jobs not even close to replacing those destroyed, this trend is sure to continue.

But experts say that intergenerational living arrangements can be a good thing.

Sometimes kids come back to live with their parents because they want to save money and get a fresh start. For others it's a very different situation - coming home can be the ultimate sign of financial defeat.

But what seems to work best is when there are some basic ground rules agreed to by the young adult and their parents.

Rules for Successful Boomeranging
The first thing to realize is that adult children are no longer, well.... children. Instead they should be considered household companions who can contribute and help run the household. Setting rules for charging rent, contributing to household duties, curfews, etc. can also help to set the boundaries and give the parents and their boomerang kid a sense of what is in and out of bounds.

When setting rules, have a mutually agreeable discussion and be flexible. It also helps to emphasize what's in it for the young adult (low rent, cable TV, food, laundry facilities, and stability) and what's in it for the parents (help with household expenses and duties, etc). Also be aware that some boomeranging kids will bemoan the loss of independence and express feelings of failure.

Parents and their boomerang kids need to have a candid and through discussion about a number of issues before they agree to live under the same roof again. These include:

• Will rent be charged and if so, how much?
• Is this arrangement for a limited term or open ended?
• Who will do which household duties?
• Do you have a car and where will you keep it?
• What's the deal with curfews, visitors and sleepovers?

When it comes to charging rent, even a nominal amount is advised so that the young adult feels like they are contributing something. It's a good idea to write up a rental agreement and stick to the payments on a regular basis. One way to figure the amount to pay is to base it on the percentage of rooms used. Say for example that you have a ten room house and your kid is using one bedroom, then that would be ten percent of the house. If the monthly housing expenses total $2,500 (interest, taxes, insurance, utilities, etc), then the monthly rent would be $250.

Parents reluctant to charge their boomerang kids any rent should also think about this; with another adult in the house, expenses for food and utilities will go up more than they might expect.

Discuss and agree to household duties such as who does the laundry, cleans the house, takes out the trash, etc.

Have a specific conversation and agree to rules for a curfew. Also discuss if and when visitors or "sleepovers" are allowed.

Meet weekly to check in with each other to discuss how it's working. New issues could come up like smoking, finances, noise levels, etc.

Don't make it too easy or too comfortable. Boomerang adults should be expected to pick up and clean the house to your standards, not their own. When meals are provided, they should be expected to contribute towards food bills, preparation and clean up. Think of the parents in the hilarious movie, "Failure to Launch" and you get the idea.

Also, resist financial bailouts and paying off your boomerang kids credit card debt and student loans. Never co-sign for their credit cards. Instead help create a debt pay down plan and a goal oriented savings plan.

The big idea is this: this living arrangement should be viewed as a once-in-a-lifetime opportunity for a boomerang adult to improve their financial situation and get a fresh start.

Ray Martin

View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.

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