Over the recent years, we often hear about “the boomerang generation,” or the increasing number of young adults who briefly move out only to “boomerang” back to living with their parents. A 2011 survey by the Pew Research Center shows this is a social trend on the steady incline, with more than half (53%) of the 18-to-24-year-old population, mainly recent college graduates, currently living at home. Many say financial hardship contributes significantly to their decision to move back in. Amid the ongoing economic downturn, this adds to what seems like a grim picture for college graduates – underemployed, in debt, and still financially dependent of their parents.
But is the situation really that bad?
The answer: Not completely. Statistics show this arrangement can be mutually beneficial for both the parents and the grads financially, with open dialogue and long-term planning from both sides.
So, young grads: Moving back in with Mom and Dad can have many advantages, as long as you’re coming home as an adult – responsible and with a plan. Here are a few starting steps:
- Look at the long term – Understand what your parents expect: Living at home should only be a phase. Set a target time to move out – this doesn’t have to be strictly applied, but a goal. Plan whether you will wait for the right job or seek short-term employment to save up for the move.
- Be ready to contribute – Again, remember you are not living with your parents as a child, but as an adult living with other adults. Your move back will increase expenses in the house, such as groceries, electricity… Determine how much you are able to contribute, and what method works best for you: paying monthly rent, splitting the bills, or alternating certain expenses… You can also offer work instead of cash payments (mow the lawn, shop for groceries, clean the house…)
- Initiate “the talk” – Show your parents that you’re now a responsible contributing member of the family. Openly and clearly discuss your financial plans and propose money arrangements. Be considerate of your parents’ ideas and expectations. Strive for consensus and arrangements that are as specific as possible. Among the most important topics, clarify financial ties: How much are they willing to help you? Is there any condition or a time limit? Will the help be viewed as a loan or a gift?
- Use your time at home to learn – Living at home introduces you to the financial responsibilities of an adult in a household. Make use of this time to figure out these responsibilities – how to pay bills, how much they cost… – to prepare yourself to live on your own. It’s also a great time to learn about financial independence through saving and determining what expenses should be prioritized in paying… Subscription to EDSA’s Good Money Habits for Students online program can be a good first step for those unsure where to start.
- Maintain family communication regarding financial issues – Not only check in with your status, but also ask whenever you are unsure or need clarifications. Make sure everybody in the family is on the same page.
Following these steps, new college grads can maximize the financial benefits for themselves and their parents as they move back in. Next week, we will discuss some tips for parents to meet the grads half-way during their “boomerang move” home.
What do you think about the tips above? Would you add any other advice? Comment below and let us know!