FAMILY FINANCES


Boomerang Budgeting

What do you call an empty nest when your grown kids move back home? The Real World, recession edition. Job prospects for the Class of 2009 are "considerably below" those of the past five classes, according to the National Association of Colleges and Employers. Not surprisingly, many young adults have decided to wait out the recession under the parental roof, says Manny Contomanolis, president of NACE. Based on what he's been hearing, moving back home "is more prevalent than it's ever been."Cecelia and Jerry Cannizzaro are enjoying their full-house experience. Not only do they get a chance to reconnect with their two grown sons, but they're also helping them build a solid financial base so that when they're ready to fly the coop for good, there won't be any crash landings.

Mark, 24, has been living at home in Oakton, Va., since he graduated from the College of William & Mary in 2008. Stephen, 22, returned after graduating from the University of North Carolina at Chapel Hill in May. Both hope to find jobs that will pay enough to enable them to move out and be on their own. Until then, Camp Cannizzaro -- the family's light-filled, spacious home in a leafy Washington, D.C., suburb -- will have to do.

But for many families, such newfound togetherness can be a challenge. To avoid heartburn on one side of the equation and boomerangst on the other, be sure to discuss expectations upfront (for editor Janet Bodnar's take on the boomerang experience, see Five Lessons From Boomerang Parents).

Make the rent decision. Since graduating last year, Mark Cannizzaro has worked at several temporary jobs, including a nine-month stint as a legal assistant at a Washington law firm. His parents allowed him to live with them rent-free for the first year. "At $16.50 an hour, how can you accumulate enough money to move out?" says Jerry, a financial planner. This spring, the Cannizzaros decided it was time to ask Mark for a modest monthly amount -- but they suspended the requirement when his last temp job ended.

Is it appropriate to ask your own flesh and blood to pay rent? Sure, says Sheryl Garrett, a financial planner and founder of the Garrett Planning Network. "You want them to have some semblance of reality, so it's not a free ride," Garrett says. That doesn't mean you have to soak them for all they're worth. "I'd charge less than the going rate. If the monthly rent in your market is $500, you might charge your child half that."

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Some parents use the rent payments as a form of forced savings, stashing the adult child's monthly rent contribution into a savings account that can be used for future expenses, such as a down payment on an apartment when it's time to move on and out. But others, such as Carol Harms of Elmhurst, Ill., encourage adult children to take advantage of the family home for as long as they like. Charlie, the second of four, took his mother up on the offer. By working two jobs and saving hard, he was able to pay off $6,000 in student loans and save more than $30,000 -- by age 25.

Encourage the job hunt. Whether you charge rent or not, sooner or later you expect that your kid will find a job and accumulate enough money to get to the next stage of life. Everette Orr, a financial planner in McLean, Va., says that adult children who forever come up empty on the job front may not be looking in the right places. "What the kid is saying is, ÔI don't want to be underemployed or employed at something I don't want to do.'"

Fair enough, but you might decide to give your young adult time to focus on finding the job that will launch his or her career, or at least point it in the right direction. In that case, be clear that you expect the daylight hours to be well (not Wii) spent, says Garrett. "Tell Junior, 'While you're here, your job is to find a job.'"

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