How to Avoid Boomerang Kids

Attention blissful empty-nesters: there’s a good chance your college graduates will be moving back home.

That’s the not-so-pretty picture being painted by a handful of grim reports, including’s “2010 State of the College Workplace,” which found that a whopping 52% of recent grads are living with their parents, up from 40% in 2009.

While the sluggish economy doesn’t help--nearly 40% of 18 to 29 year olds are jobless or out of the workforce, according to Pew Research Center-- there are steps parents can take to prevent their children from “boomeranging,” experts say.

The key? Start early, says Janie Schiltz, director at Northwestern Mutual.

“Financial security isn’t something where you turn 25, snap your fingers and say, ‘I’ve got it!’ ” she says. “Good habits start very early on in life … and it helps when parents learn how to stop giving in to their children.”

In other words, stop being bulldozed by your kids. Schiltz warns of the “easy money” phenomenon highlighted in a recent poll by it found that over 80% of parents are always or occasionally giving in when their kids ask for money. “It’s always easier to say ‘yes’ than ‘no’, but you’re really not teaching your child the financial discipline for building resources and handling money,” she says.

And unless you want to be doling out cash until you’re 80, start now by establishing rules around spending, saving and differentiating between wants and needs, Schiltz says.

That’s not to say it’s easy for young adults to avoid money blunders that will send them straight back to their parents’ nest, says Will deHoo, founder and CEO of consumer advocacy group FoolProof. He cites things such as “status-buying” and credit card addiction among the top ten reasons kids move home before age 30.

“It’s not that people are making one big mistake, like spending $100,000 in one spot. Big money problems usual come from small mistakes happening over and over again,” says deHoo, who at 31-years old, has never moved back home.

And sometimes a parent’s best intentions go awry. A trend in “cockpit parenting”-- a term describing parents who steer their children’s lives--has given rise to a wave of young adults who have never written a high school essay, paid a bill or landed a job on their own. “We see a lot of young adults coming home because they don’t know how to live outside the world of mom and dad,” says Thomas Fox, community outreach director at Cambridge Credit Counseling Corp. “We, as parents, haven’t cut the cord yet.”

If your child is a senior in college, it’s the perfect time for preemptive action:Talk about your workplace: “A lot of kids don’t know what to expect in the workplace — so help them out by setting their expectations about life in the real world,” says Fox. That includes the gory details about office politics, bad bosses, lazy coworkers and the general realities of the working world, Fox says.

Use your network: Tap into your well-established connections to reach out to potential employees, either in person or via social networking tools like Twitter, LinkedIn and Facebook. Consider setting up a lunch with your colleague and your son or daughter to get the ball rolling. “Simply make the introduction and let them be,” advises Fox.

Get real about your own money: “Parents need to take a good look at their own spending habits,” says DeHoo. “Seventy-five percent of parents out there say they don’t have the tools or the skills to teach their kids.” For starters, don’t hide money issues at home; talk to your kids about a budget crunch on the homefront and ask them for ideas to cut down household costs.Of course, not everyone can dodge the boomerang bullet. A tough job market and sky-high student debt levels often mean some young adults are forced to move back with their parents — and others do so by choice.

If that’s the case, there are still ways to fast-track their journey to independence:

Agree on a plan: Talk your son or daughter about their plans to move out and devise a timeline. If they’re saving money for a downpayment on a house or paying back a student loan, discuss the details of monthly payment plans. Consider becoming your child’s “bank”, Schiltz says. “Get them to commit to a number and write you a check each month,” she says.

Now’s the time to have a conversation about household expectations, too: who’s going to do laundry? Shop for groceries? Do the household chores? “Set up expectations so everyone feels like they’re participating in the workload,” Schitlz says.

Encourage them to get a job (any job!): If your son or daughter isn’t working, gently nudge them to take temporary work instead of holding out for their idea job, Schiltz advises. “Something is better than nothing. They need to show future employers they have skills to get them in the door.”

Talk to a credit counselor: Make an appointment at a nonprofit credit counseling agency, especially if your retirement plan will be affected. “There’s plenty out there that will give you a financial analysis, look over your situation and help you develop a realistic plan financial plan for your situation,” advises Fox. The opinion of a non-biased third-party is often all it takes to snap a financial picture into focus.

Look on the bright side: Living with an adult child isn’t the end of the world. In fact, some parents might savor the idea of having the chance to forge a new and improved relationship with their child. But remember, they’re adults now: “The hardest part for parents is to step away and stop seeing their 23-year-old as a 10-year old,” says Schiltz. “If the kids don’t walk away from the situation with a lesson learned, it’s a wasted opportunity for everyone.”