If working adult children return home to live with their parents, there should be a financial benefit to the household, in theory.
But adding an extra income into the mix only pays dividends if ‘boomerang kids’ contribute to household expenses – and therein lies the problem for many among the increasing share of parents who are in this position.
Recent research has found that almost one in three parents whose adult child lives with them said their offspring rarely or never contributes financially to the household and 19% said that the living arrangements are negatively impacting their financial planning or retirement plans.
The Talker Research poll of US adults for BOK Financial revealed that 85% of parents were delighted to have their kids back home and most said their child had asked to move back home due to the cost of living (42%) or to save money (33%).
However, 27% of respondents admitted that they were not financially prepared for a child returning home and many said it has added to the financial strain they are feeling. Almost half said they are concerned about their child ever being financially independent.
Three in ten said their child is worse off financially than they were at their age and 56% are not confident of them being financially secure enough to leave home.
But, while it could be at least a year before adult children leave the home again, there is an opportunity to help them improve their financial literacy in the meantime, especially around saving and budgeting.
“If you have adult kids living at home — which isn’t uncommon nowadays! — it’s an opportunity to model good financial practices while encouraging them to save diligently,” said Leasa Melton, manager of product strategy for BOK Financial. “But, like everything else in parenting, it’s a balance between letting them learn and helping guide them. They’re often living at home to save up for their next step of independence and having them in your house gives you a chance to cheer them on in a safe environment.”
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