Sargent & Lundy Savings Investment Plan

COPING WITH A "BOOMERANGER"

The following excerpts are from an article in the Spring 1997 issue of the "MFS Perspective" magazine. The opinions expressed may or may not reflect those of the SIP Committee.
No matter how much parents love their children, there's no doubt many look forward to an "empty nest," when they can have their homes -- and each other's company -- to themselves again. But today many nests don't stay empty for long. The difficulty college graduates have finding professional jobs forces many to move back home after school. Even those who immediately gain entry-level work may not earn enough to afford an apartment.

Corporate downsizing and the high divorce rate complicate the problem, so that many children are returning home even after they've been out heir own for a few years. U.S. Census Bureau statistics confirm the trend -- 22 million young adults are now living with their parents. That's a 50% increase over the last 25 years.

Parents, who thought their financial obligation to their children would end with the final college tuition bill, are wondering how they'll be able to meet the costs of grown children who still depend on them. Indeed, in a recent survey conducted for MFS by the Roper Starch Worldwide polling organization, supporting adult children registered as a greater financial worry for investors aged 40 to 64 than paying for college or planning their estates. Only retirement ranked as a bigger concern.

Investment and family counselors can bear witness to that fact. They're finding more and more parents are turning to them for help dealing with the emotional and financial issues that arise when adult children "boomerang" home. The counselors can offer reassurances to parents, for they suggest there are ways to cope with a "boomeranger."

1. Talk it out first. When the phone rings, and your daughter is upset about a lost job, or your son is distraught over a failed relationship, you'll naturally want to come to the rescue. But for answering "yes" to the request to come home, couples should talk it out with each other, recommends Ann Vernon, a professor of counseling at the University of Northern Iowa in Cedar Falls.

Husbands and wives need to give each other the freedom to be open and honest, without one accusing the other of being heartless if he or she has reservations about letting the child back, she says.

The reluctant parent might have valid concerns. The mother might not want to put up with the son who always makes long-distance calls and then can't pay the bill. Or a father might not want to listen to his daughter constantly harp about how outdated her parents' tastes in clothes and music are.

One partner also might not be willing to settle for less time alone with the spouse. A husband may have come to enjoy antiquing with his wife on Saturday mornings, and he fears she'll want to go back to attending all of their daughter's weekend softball games.

Getting these sorts of problems out in the open, and addressing them ahead of time, could prevent major arguments later on, stresses Dr. Vernon. The new living arrangement will work out, after all, only if it's on terms both partners can accept.

2. Negotiate the terms. If parents do decide to let a son or daughter return home, they should sit down with their adult child as soon as possible and "be very clear about what their expectations are for order, privacy, and respect in their home," says Dr. Vernon.

It does no good to put these conversations off, assuming you'll deal with problems as they arise," cautions Anita Rosen, a senior staff associate at the National Association of Social Workers in Washington, D.C. "Because then you're dealing with everything in crisis, when tempers are flaring."

To prepare for these conversations, parents can develop a checklist of issues to discuss, such as:

* How long will the stay last?
* What will the division of labor be around the house?
* Will the child pay room and board?
* Who will be responsible for bills, such as the telephone, student loans, car, and health insurance?
* What happens when either the parents or the child want guests over?

Both parents and children should treat these discussions as true negotiating sessions, with each side willing to make concessions, suggests Ms. Rosen. Maybe the parents agree to charge their daughter $100 less for room and board each month as long as she agrees to save that money in an account she'll use to get her own apartment eventually. Or maybe the son who can't afford to pay room and board because he's returning to graduate school could use the "barter" system to cover the cost of his meals and use of utilities. He could, for example, offer to do all the weekly grocery shopping or laundry.

As Jane Myers, a counselor and educator at the University of North Carolina at Greensboro, notes, the agreement will carry weight only if parents stick to its terms.

If your daughter misses her monthly auto insurance payment because she spent the money on a weekend trip, then maybe you shouldn't reach for your checkbook. Perhaps she'll have to make the payment and late fee with her following week's paycheck, even if that leaves no money for socializing on the next weekend.

3. Put it in writing. Some families find it helps to draft the terms of their living arrangement in a written contract, which everyone signs. "Seeing everything in writing can raise everyone's level of commitment," says Dr. Myers.

If a contract sounds too formal for your family, you might find other ways to use written reminders. Perhaps it's a simple as keeping the weekly schedule for household chores posted on the refrigerator.

4. Don't stop talking. With minor children, it's easy to lay down rules, but living with an adult child requires constant negotiation, says Dr. Vernon. She recommends families schedule regular meetings or agree to set aside one or two family dinners per month as the time to review the circumstances of living together.

Issues will keep coming up, she emphasizes. A daughter might feel it's an infringement on her independence to have to all home when she's out late. But parents might become furious on nights when the clock strikes midnight and they have no clue where their daughter is. Still, 3 a.m. in the entry hall is probably not the time or the place to have a rational discussion about the situation.

5. Maintain your lifestyle. Parents and any minor children at home shouldn't have to sacrifice too much to accommodate a returning adult child, says Ms. Rosen.

You and your spouse may have become used to dining light or eating out more often. You won't be an irresponsible parent if you let your grown children know the family doesn't have formal dinners on weeknights anymore, so they're on their own at suppertime.

You might have enjoyed having the house to yourself because you could practice for your ballroom dancing classes in private. There's no reason to stop that because your son and daughter are home again. You could continue to roll back the rug on Tuesday nights. Your children may just have to accept the fact that the family TV is off limits from 7 to 9 p.m. and that an audience, snickering at their parents' missteps, isn't welcome.

Your son who waited 14 years to inherit his big sister's larger bedroom probably deserves to keep it. Big sister may have to accept the smaller room down the hall or the finished one in the basement.

6. Learn to let go. When sons or daughters are hundreds of miles away, it's easier to let them adopt whatever lifestyle they choose -- or pierce any body part they want.

"It's much more difficult when you're staring at purple hair or a pierced eyebrow every day," says Dr. Vernon. "Still, parents need to remember they're dealing with a legal adult, and you can't control a 22-year-old the way you could a 14-year-old."

Requests for girlfriend/boyfriend sleepovers can still be reasonably vetoed, but maybe insisting that your son dye his hair back to its natural color or that your daughter remove her navel ring is going too far.

7. Treat your son or daughter as an independent equal. "When adult children are acting responsibly -- when they're taking the job search seriously or paying rent and cooking dinner a few nights a week -- parents need to accept them as equal residents of the home," says Ms. Rosen.

That may mean not convulsing if your son asks if he can have the house for a party. "Parents have every right not to expect a drunken brawl, but if they can trust their child with a quiet dinner party, they may want to say, 'Okay, you can have the house to yourself for the night. We'll head out to dinner and movie,'" suggests Ms. Rosen. Parents also shouldn't feel guilty about conducting their social lives on their own, without inviting their child to every dinner party or event, she says.

8. Don't crack your nest egg. Often children return home with a mountain of debt. They might have had to take out major loans to help pay for college. Maybe credit cards were just too easy to get. Or perhaps they simply never learned how to handle money.

Eager to help their children escape from under the weight of that debt, some parents consider paying it all off. With the debt sometimes as high as $20,000 or more, parents naturally turn to their biggest source of assets -- their retirement funds.

"I encourage my clients, if at all possible, to leave their retirement money alone," says Jim Joyce, a PaineWebber investment adviser in Hingham, Massachusetts. "Sometimes they want to take a loan from or stop contributing to their 401(k). But if they do that, then they lose all the benefits of those plans -- the tax write-off on contributions, the tax deferral on their earnings, and any company match."

"I've often suggested taking a loan as an alternative," he says. If the debt is on high-rate credit cards, the parents can probably reduce the interest charges with a lower-rate loan. Parents, if they wish, can then let the child assume responsibility for paying the monthly installments.

"People sometimes don't realize how much they'll need to live on during retirement," he says. "If the most you ever earned was $50,000 a year, a $400,000 nest egg might seem like a huge sum of money. But you have to remember you'll need to live off that amount for 20 years or more when you retire. If you reduce that sum of $20,000 or $30,000 in one shot, the withdrawal and the loss of future earnings on that money could significantly reduce the amount of income you'll have to live on each month."

9. Foster financial responsibility. If children get into trouble because they weren't balancing their checkbook, paying bills on time, or were spending twice as much as they earned, then writing a big check to eliminate their debt won't solve the problem, says Dr. Myers.

In these case, parents may have to insist that their children take a money- management course at the local community college or meet with a financial adviser to learn how to budget.

In more drastic situations, parents might suggest their children get help from a credit counseling service. These local nonprofit agencies help people develop budgets and will even negotiate with creditors to lower someone's monthly payments.

10. Keep investing for yourself. Even when you child isn't in debt, simply having another person at home will raise your household expenses. While trying to meet those raised expenses, parents can't afford to stop saving for retirement, says Neil Fried, an investment representative with INVEST Financial Corporation at Ramapo Bank in Wayne, New Jersey.

"I tell my clients to set up an automatic investment program so that money comes out of their checking account each month and goes right into their retirement funds before they're tempted to spend the money on anything else. I advise people to invest as much as they can, even if it's only $50 a month." Otherwise, he cautions, the years keep passing by, and people find themselves at 65 staring into retirement and wondering how they're going to live on their meager savings.

This page updated on 7/28/98

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