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The Phenomenon of Adult Children Returning to Live with Their Parents

The phenomenon of adult children returning to live with their parents has become increasingly common in recent years. According to the U.S. Census Bureau, one in three adults between the ages of 18 and 34 are currently living with their parents. This trend can be attributed to various economic factors, including rising rents and the burden of student loan and credit card debt.

Financial expert Bobbi Rebell, CEO of Financial Wellness Strategies, has firsthand experience with the challenges faced by multigenerational households. She lived briefly with her parents as a young adult, and her two adult children lived with her and her husband for two years after graduating from college. Rebell admits that establishing boundaries and managing finances was initially difficult, especially since she was responsible for most of her children’s living expenses. Furthermore, her children did not always follow her financial advice, which added to the strain.

Rebell eventually realized that she needed to treat her adult children more like roommates than dependents and allow them to manage their own money. When adult children move back home, it is crucial for both parties to discuss and decide how much they will contribute to household expenses. This can include a percentage of their wages towards mortgage or rent payments, or a set monthly amount. However, Rebell emphasizes that the financial contribution should be based on the child’s financial situation and their goals for saving and eventually moving out.

If adult children are unable to contribute towards housing expenses, they can still contribute by paying a portion of utility bills, phone bills, or insurance premiums. Additionally, if parents provide financial assistance for personal expenses such as car payments or health insurance, it is essential to establish whether the money is a loan or a gift. To avoid misunderstandings, it may be wise to put these financial arrangements in writing.

Another important aspect of this arrangement is setting a deadline for how long the adult child will live at home. While parents may want to support their child through financial difficulties, it is crucial not to enable dependence for an extended period. By setting goals and targets, such as saving enough for a security deposit or paying off credit card debt, adult children can work towards financial independence.

Parents should also consider the impact of financially supporting adult children on their own finances. A survey by Intuit Credit Karma revealed that over three-fourths of parents who financially support their adult children experience adverse effects on their own financial situation. This includes limited retirement savings and other financial constraints.

In conclusion, the phenomenon of adult children returning to live with their parents is a growing trend influenced by economic factors such as rising rents and debt burdens. Establishing boundaries and open communication about financial expectations is crucial for both parents and adult children in these situations. By setting clear goals and targets, adult children can work towards financial independence while parents safeguard their own financial future.

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