If your boomerang kid has to come back

According a recent story in The New York Times Magazine, one in five people in their 20s to early 30s is currently living with their parents. The article goes on to say, "about 60 percent of all young adults receive some financial support from their parents." When an adult child returns home, typically after graduating from college, it's known as boomeranging, and it can be a good thing or a bad thing.

The explanation the Times gives for these alarming numbers is that today's generation of young adults graduated from school and entered the job market during "a series of unfortunate and overlapping economic trends" and when soaring tuition bills left them heavily burdened with student loan debt. (Note that as Derek Thompson later pointed out in the Atlantic, the Census Bureau report the Times and many other media outlets used includes students living in dormitories in the category of adult children living at home.) Nearly half of college grads today are unemployed or underemployed in jobs that don't require a college degree and pay substandard wages.

Some say boomeranging is a rational choice that helps keeps expenses minimal while a young adult has yet to become self-sufficient financially. But for many boomerang kids, living in a parent's home becomes a crutch, enabling them to put off making grown-up decisions about work, financial responsibility and dealing with the realities of living on one's own.

Even if you've tried to prevent your college grad boomeranging, it can still work -- if the young adult is working, contributing to the household and following some basic ground rules. The bad scenario is when there is no job, no effort to get a job, no contribution, no set departure date and no rules. Parents who allow this situation perpetuate a co-dependency that's unhealthy for their adult child and disrupts her path to self sufficiency.

Boomeranging rules

The first thing to realize is that young adults are no longer children. They're now household companions who need to live within their parents' rules. When setting rules, have a mutually agreeable discussion and be flexible. Also recognize what's in it for the young adult and what's in it for the parents. A list of things to discuss includes:

  • Will rent be due and how much?
  • Is this living arrangement for a limited time, or is it open-ended?
  • What are the household duties, and who will do them?
  • Does the young adult have a car, and if so, where will it be kept?
  • What's the deal with curfews, visitors and sleepovers?

As for charging rent, even a nominal amount is advised so that the young adult feels like he's contributing something. It's a good idea to write up a rental agreement and stick to the payments on a regular basis.

Meet monthly to check in and discuss how it's working out. New issues such as smoking, finances, noise levels, etc. are likely to come up.

Parents shouldn't make it too easy and too comfortable. Boomerang kids should be expected to pick up and clean the house to your standards, not theirs. When meals are provided, they should be expected to contribute to food bills, preparation and clean up.

Also, parents need to resist financial bailouts and paying off boomerang kids' credit card debt and student loans. Never co-sign for their credit cards. Instead, help your boomerang kid create a debt payment plan and savings goal. The low-cost living arrangement should be a time used to improve their financial situation and get prepared for a fresh financial start. If an adult child has to boomerang, it should only be once.

  • 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.