Kevin McCormally: I am Kevin McCormally of Kiplinger's and I am here with Janet Bodnar, the Deputy Editor of Kiplinger's Personal Finance Magazine to talk about Boomerang kids. Janet, is it my imagination or more young adults coming home to live with Mom and Dad?
Janet Bodnar: They sure are Kevin. Surveys consistently show that more than half of college students expect to come home and live with Mom and Dad for at least a while after graduation and the official demographers tell us that we really should not expect to be empty nesters until the last of our children hits 24 years old at the very least, so it is going to be a while.
Kevin McCormally: What is going on here?
Janet Bodnar: Well I think a number of things are going on. First of all, you have more kids doing gap years, taking off a year so after college to figure out what they want to do with the rest of their lives. Sometimes they are living with Mom and Dad in or near expensive cities where they cannot afford to live on their own, at least, in the style to which they would like to be accustomed with their first income. And sometimes they come back, because of something that happens in their life, a job loss, a divorce, something like that, and they come home to see Mom and Dad.
Kevin McCormally: Is this healthy?
Janet Bodnar: It can be; yes, because I think most parents are willing to welcome their kids back, number one; and the generations seem to get along better than they did a generation or two ago. So that is a good thing, but you do have to organize and set out this arrangement ahead of time, it really does help to do that.
Kevin McCormally: What kind of ground rules do you recommend?
Janet Bodnar: Well I always say that kids need to come home with a plan and that is the plan with a capital P and you need to talk about how long are the kids going to stay, number one? What are the ground rules of the house going to be? And third, what are the finances going to be? What kind of financial arrangements are you going to work out with the kids?
Kevin McCormally: Should the child pay rent?
Janet Bodnar: I think the child should pay rent, if the child has income. Obviously, if your child is back home because they are going to graduate school, they do not have any source of income, then no. but they could do 'in kind' services, they could help with dinner, they could do the lawn, mow the lawn, they could put up the store windows, and that kind of thing. But if a child does have income, I think he or she should really be contributing to the finances of the household.
Kevin McCormally: How much support, beyond housing, should the parents provide?
Janet Bodnar: A lot of that is going to depend on you, the parent; but what I always say is, you might want to provide your kid with a safety net, but not a featherbed. So, for example, if your child does not have health insurance immediately after college, it would be smart for you, it could be smart for you to pay for health insurance, because if something were to happen to the child, you might be on the hook for that and so getting a low cost, high deductible health insurance policy would make sense. Or, for example, if you wanted to invest in a condo where your child would live, pay you rent, and act as an onsite caretaker that could make sense.
Kevin McCormally: Finally do you set a deadline for them to leave?
Transcription by:
Scribe4you Transcription Services