Ground Rules for Boomerang Kids

Suzanne Bernier is one of the lucky ones. Just before graduating from Brandeis University in 2010, she landed a job at a medical software company. Yet after graduation, the frugal 24-year-old moved back in with her parents. “I wanted to save as much money as possible,” she says.

More than one-fifth of people ages 25 to 34 live in multi-generational homes, the highest level since the 1950s, reports Pew Research. The hospitality helps boomerangers stay positive in tough times. More than three-fourths of people ages 25 to 34 who have lived at home are upbeat about their future finances, according to Pew.

Laying ground rules can help prevent a clash of the generations. “Put a game plan together with expectations,” says Linda Leitz, a certified financial planner in Colorado. Parents who open their homes should establish a time limit for the stay and get regular progress reports. The child should pay rent, save money or pay off debt. Don’t subsidize a lavish lifestyle. If kids can’t contribute money, consider requiring household chores instead.

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Parents should gradually turn up the heat, Leitz says. Raise the cost of rent by a certain date, for example, even if your plan is to make a gift of the money when your child departs. The comfort of home shouldn’t be cushy enough to erode financial independence.