Baby Boomers and Their "Boomer-ang" Children

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In recent years, many Baby Boomers have witnessed a growing trend: Their children are moving back home after graduating from college. In part, the return of the “boomerang” children to the nest may be due to the high cost of living and a tight job market. Yet, parents who may have already spent a considerable amount of money on a child’s college education, as well as helping with other expenses, may be concerned about this turn of events.

After college, many young adults find themselves struggling to stand on their own feet financially. While this may be due to a highly competitive job market and high cost of housing in certain parts of the country, in other cases, spending habits that some younger adults have grown accustomed to rather than saving may be the culprit. Therefore, these individuals lack the necessary financial self-sufficiency to live on their own.

Parents who wish to see their children leave the nest and make it on their own may consider establishing the following ground rules:

Rule number one. Adult children may be asked to contribute cash or services in lieu of rent to the household. At the same time, they may also be expected to save a significant portion of their earnings for a down payment on a home; first month, last month, and a security deposit on a first apartment; or start-up funding for a business.

Rule number two. Parents can help their children achieve financial self-sufficiency by encouraging them to set goals and monitoring their progress in meeting those goals. An incentive plan could further help this effort. For example, for every dollar an adult child saves, his or her parents may wish to contribute a certain percentage.

For parents who are too emotionally involved to teach their adult children good spending and saving habits, a professional advisor can perform a valuable function as a neutral, outside party in counseling young adults on how to loosen the “ties that bind” and pursue financial freedom.

Stephanie Mazzarello