I have a confession to make. I'm the parent of a boomerang kid, and I'm thoroughly enjoying it. Peter, our youngest child, is living with us temporarily while he attends graduate school at the University of Maryland, a stone's throw from our house. Financially, it's a great move for him--he gets in-state tuition and free room and board. But my husband and I get a few things in return: someone to take out the trash and get the car inspected, chauffeur us to the airport for early morning flights, and keep us up-to-date on the standings of every team in every sport. If not for Peter, how else would we know that Daft Punk's latest hit album is Random Access Memories? "He keeps me young," says my husband. And the best thing about having a 24-year-old around the house: tech support.
Peter's two older siblings also came home briefly after graduating from college, which makes our family part of a trend. In a survey by the Pew Research Center, 29% of parents reported that an adult child had moved back home in the past few years because of the economy. The Pew analysis showed that the share of Americans living in multigenerational households is the highest it has been since the 1950s. The vast majority of these young people say they are satisfied with their living arrangements. And if my husband and I are any indication, many parents are, too.
Rules for success. Nevertheless, the arrangement can get old--and costly. Another Pew study found that 48% of parents had provided some financial support to an adult child in the preceding year. In a survey of Kiplinger's readers, 41% said they had helped their kids financially.
If you're going to support your grown children in one way or another, the best way to make the arrangement work is to follow some ground rules:
1. Be clear about your expectations. Before the kids come home, agree on how long they'll stay, what the house rules will be and how much they'll contribute in either cash (if they have a job) or services (if they don't).
2. Help with the job search--but don't hover. When our kids started looking for "real" jobs, we found they were more receptive to the parental job-hunting tips they used to ignore, such as making personal contact with potential employers. But they did the legwork.
3. Be selective in offering financial assistance. Over the years, we've helped our kids purchase cars, paid for their health insurance before they had jobs and kept them on the family cell-phone plan. But they bought their own phones, covered the household cable bill and paid for their entertainment expenses.
4. Help them tackle student loans. Show them how to work out the best deal (see 5 New Rules on Student Loans), but don't pay the bills. Same goes for credit card balances. You might lend them the money to pay off credit cards or buy a car and have them pay you back at a reduced rate of interest, but make the arrangement formal unless you're prepared to make a gift of the money (see our new advice on helping your kids buy a house).
5. Don't let kids use your credit cards. And I'd advise against cosigning for a loan (see Should You Cosign a Loan?). You can't jeopardize your own finances if your goal is to retire early to a foreign hotspot or a domestic dream home.
6. Make any gifts infrequent and unexpected. Your kids will appreciate your generosity instead of taking it for granted.
Two of my children are now married, and we've come full circle: My husband and I are on our older son's cell-phone plan, and we divvy up the bill.
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