Returning to the Nest

There is a growing trend happening to many families right now. Some of our readers may be experiencing it. You sent your kids off to college to become an adult and gain the knowledge and skills needed to start a successful career. The only problem is that many students don’t find job offers tucked in with their diploma. So what do they do? They return home to once again take over their room that you wanted to turn into your home office.

There are many reasons that this “boomerang generation” is moving back in with their parents; everything from graduate school, unemployment, debt problems, or divorce. The point is that it can have financial effects for both you and your adult kids.

On the positive side this can be a huge benefit for your kid. Rising rent costs and a slow job market can be hard for a recent graduate to save and start their own life. Moving back home can be a wise financial move for adult children. Instead of struggling month-to-month and running up credit cards, they can stay at home and save up a significant amount of money to get them started on the right path.

There are also negative side effects for the parents. Parents may be trying to save up for retirement and there will be some extra costs that will come with another resident. Parents can expect larger grocery bills and utility bills as there will be more water used from showers and laundry and more electricity due to an extra TV or computer being used. Even though there are extra costs many parents welcome, if not enjoy, having their children back home with them, as long as it is temporary.

The best way to do this successfully is to set up a set of ground rules before your child decides to move back in. You can write up a rent contract and be open to negotiating. Set a time frame and guidelines for length of stay. A time frame will give them a goal to reach. Discuss with your kids realistic steps that will need to be taken in order for them to reach their goals of saving money, moving out at a specific date, looking for a job, paying off debt, and so on.

Make sure they are not going out every night spending the money they should be saving on a party lifestyle. You may need to step in if your son tells you he is spending a week in Colorado for a big ski trip.

Even though your son/daughter is an adult now you can still request that they abide by your house rules, whether it is calling if they are going to be out late, or use of your car.

As far as rent goes, it is up to you. If the extra expense of your child moving back in is causing you a strain, then by all means charge an amount that will compensate for the expenses. Charging them a high amount or an amount similar to rentals in the area is defeating the purpose of them moving back home.

You can start out with a small amount of rent and then raise the price to encourage them to find a place.

You can have them pay a set amount and share the amount of the utilities and groceries. If you find that you are not in need of the money it still may be a good idea to charge rent. Have them pay you then put the money in an account and then you can surprise them with a nice gift when they move out. In lieu of rent have them pitch-in with chores or have a specific night where they will cook.

More than likely, your child will not be covered under your health insurance anymore. Encourage your child to get their own life insurance plan. If they are just starting out and do not have the money to pay the premiums, it may be worth it to help them pay. Even something as little as stitches can easily take a hit from anyone’s savings without insurance.

Parents can even receive a tax break by having their kids move back in with them. Parents generally can claim their children, regardless of age, as dependents if they are unmarried, have less than $3,050 in gross income (or are younger than 19, or younger than 24 and a full-time student), and receive more than half of their total support from them. The dependent exemption could save parents in the 15% tax bracket more than $400.

The best thing you can do is leave the lines of communication open and address any concerns as soon as they happen.

So if your child is close to getting their degree, you may want to wait a little longer before turning tier room over to an interior decorator.

Pioneer Credit Counseling is a bonded, non-profit credit counseling agency offering debt management programs, financial counseling, bankruptcy counseling and housing counseling nationwide. Call our friendly counselors today at 800-888-1596 or visit

Our accredited credit counselors will help you take control of your financial life and get out of debt faster than you can on your own. We offer a debt management program that will stop the collections calls, lower your monthly payment and provide you peace of mind. Our pre and post bankruptcy counselors provide an easy process for you so you can focus on rebuilding your financial being.

It is our policy at Pioneer Credit Counseling not only to help people get out of debt, but also educate in sound budgeting practices.

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