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The revolving door: Handling the financial burden of a returning child

Oct 14, 2011, 9:36 a.m.

Today's tough economy makes it difficult to make ends meet, and as a result there seems to be more adult children returning home to their parents' nest. These boomerang babies can crimp your style, especially if they show up with grandkids. While you love them dearly, this situation may put a financial burden on retirees and still-working adults.

To minimize the financial impact of an adult child returning home, consider these ideas to make it easier on you and your children:

Communication. Discuss the financial implication of his or her return home with your child. This may be difficult if money is a taboo subject in your home, but he or she has to know where you stand. Be firm, letting him know what your expectations are in terms of financial support and time frames for allowing him to get back on his feet.

Contribution. Nobody rides for free. Even if you can easily handle the financial burden of another adult, this is a symbolic gesture. You must be prepared to ask for a specific monetary amount, even if it is $50 a week. If a returning adult is going to put a strain on your budget, factor in all of the costs: food, utilities, laundry and personal hygiene articles. These costs will add up quickly. Your child must contribute something to the running of the household. This could also include handling maintenance and repairs for you around the home, cooking meals, or running errands on your behalf.

Time limits. If your goal is to have your adult child on their own, give her a specific term during which she can live with you. This will reinforce the notion that this living arrangement is temporary. It will also limit your financial contribution to her cause. You don't want to derail your own retirement plans and goals by supporting your child and her family.

House rules. This is an important factor when your adult child returns home. Guidelines on meal times, showers, laundry and housework must be enforced. Maybe the ground rules are that he handles meals on his own. Otherwise, you will see your food bill skyrocket. The same holds true for laundry. Combine laundry to save on washing costs. Tiny loads of laundry from an individual person, however, will still increase your costs for detergent, electricity and water. Multiplying that by a daughter or son-in-law plus children will make this an even bigger concern. Again, set the rules on these issues upfront.

Think before you act. It is very tempting to help your children out of their financial dilemmas. Sometimes, children think their parents are wealthy or that they enjoy rescuing them; either way, be careful. Don't sabotage your own retirement to rescue your child. You might have only a few years to save before you retire, while your child might have 25 years. The best help you can give them is a temporary roof over their head so they can find a job and start fresh.

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