Advice for Parents of Boomerang Kids

When your adult children move back in, lend them a hand without letting them get too comfortable.

Confession time: I have had one child boomerang back home after college and am about to have another.

I've dished out lots of advice to other parents on what to do about financial issues that crop up when kids head back home (see Writing a Contract for Boomerang Kids and When the Kids Come Home). So when our son John returned after graduating in 2005, I felt obliged to eat my own cooking -- or at least enough of it so that I wouldn't be embarrassed to explain how our family handled money matters in our new situation.

When John landed back home he was basically broke. A member of his college crew team, he got a job as a rowing coach at his former high school in Washington, D.C. That consumed gobs of his time, but paid barely enough to cover his student loans (consolidated at a rock-bottom interest rate) and a brewski or two on weekends.

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He wanted to take a couple of classes that he needed to apply to graduate or medical school, but he didn't have money even for in-state tuition at the University of Maryland. And he was no longer covered by our family's health-insurance plan. What to do to give this kid a place to crash without making it too comfy on the couch? How to prod him into his future without being a nag?

Running up a tab

It was pointless to charge John rent; he didn't have the bucks. So he worked to earn his keep. With a flexible schedule, he started dinner while my husband and I were at work, took cars to the shop, went to the grocery store, reverted to his pre-college role of arguing with his younger brother about taking out the trash, and always did his laundry.

We paid about $60 per month to have him covered by a renewable short-term health-insurance policy with a high deductible. (Learn more about how to get short-term health coverage.) He took care of his own miscellaneous expenses -- gas, travel to visit friends, his share of the family cell-phone bill -- but we picked up the tab for his classes at Maryland (grad school, on the other hand, will be on him). When he occasionally asked for cash for an expense he couldn't cover, he joked that he'd add it to his tab and pay us back.

Plug into the network

After John finished his classes, we prodded him to look more intensively for a job before applying to grad school. Networking through a family friend, he found one.

In September 2006 he began teaching algebra and math at a small high school for emotionally disturbed teenagers -- a job he loves, much to his own surprise. At about the same time, he worked out a great deal on a basement apartment in a Georgetown row house. He pays nominal rent in return for watching the house for its owner -- his former crew coach who lives out of town (networking again).

After John moved out, he needed wheels. At the same time, my husband was toying with the idea of leasing a car. So they agreed that we would pay for the basic lease while John sent us $250 a month to pay for an upgraded model (which John gets to drive) plus his share of the car insurance.

Advice from Mom and Dad

When John started working, we found that the best financial gift we could give him was advice.

Other parents express shock that a kid would actually listen to his parents. But who else would he go to to ask about which health-insurance plan to sign up for -- we recommended the HMO because the premiums were lower and he didn't have a relationship with a family doctor -- or whether he should contribute to the retirement plan at work -- there was no employer match, so we recommended that he use his coaching money to add to the Roth IRA we had opened for him with his summer earnings as a teenager. See 401(k) or Roth IRA? to learn more.

When John did his taxes, we told him that he qualified to deduct the interest on his student loans even though he didn't itemize. And because he earned so little in 2006, he was eligible to claim the retirement-savers credit for his Roth contribution.

I'm still nagging him to set up an automatic contribution to a high-paying online savings account. But every month he diligently makes his student-loan payment, pays his credit-card bill in full and sends us a check -- which he has bumped up by an extra $100, to $350 -- to pay off the tab he figures he owes us. Turns out he wasn't joking after all.

Post script

In a couple of weeks my daughter will graduate from college and head home, at least temporarily. A biochemistry major, Claire is thinking about going to pharmacy school, or getting a dual degree in law and public health. We are prodding her to use the summer to scope out her options by networking with as many people as she can. She listens politely but doesn't commit.

In the meantime, she jokes that she is going to work as a bartender, or maybe sell yoga pants as a sales clerk at lululemon, a Canadian-based athletic-apparel company that's opening a store near us.

Yesterday Claire sent us an e-mail: "You should know that I have signed up for my bartending class and will receive my degree in mixology in just three short weeks. I have also sent my résumé to lululemon. I think that about covers my thinking about my future for today."

Turns out she wasn't joking either. But we have hopes. Her brother is turning out just fine.

See also: Life as a Boomerang Kid

Janet Bodnar

Janet Bodnar is editor-at-large of Kiplinger's Personal Finance, a position she assumed after retiring as editor of the magazine after eight years at the helm. She is a nationally recognized expert on the subjects of women and money, children's and family finances, and financial literacy. She is the author of two books, Money Smart Women and Raising Money Smart Kids. As editor-at-large, she writes two popular columns for Kiplinger, "Money Smart Women" and "Living in Retirement." Bodnar is a graduate of St. Bonaventure University and is a member of its Board of Trustees. She received her master's degree from Columbia University, where she was also a Knight-Bagehot Fellow in Business and Economics Journalism.