What To Do With a Boomerang Kid

Faith & Finance

A boomerang is supposed to return when it leaves your hand. But a boomerang kid, well, that’s something else entirely.

Do you have a boomerang kid? That’s a term for an adult child that’s returned home, like a boomerang, and now lives with you again. If so, you’re not alone. We’ll talk about what you can do about it.

You're not alone if you have a boomerang kid living in your basement. The latest Boomerang Kids Survey by Thrivent, conducted in April, found that 46% of parents have had an adult child move back in with them at some point. This trend brings unique financial challenges for both parents and children.

Impact of Student Loan Debt

The survey revealed that student loan debt is a significant factor preventing boomerang kids from achieving financial milestones:

• Buying a home: 39%
• Saving for retirement: 34%
• Building emergency savings: 36%

Additionally, 28% of young adults report living paycheck to paycheck due to student loans, with only 22% saying their first job helps them pay down that debt.

Financial Strain on Parents

An adult child living at home may not be a significant financial burden if you only provide basic necessities. However, the costs can quickly escalate when parents start covering expenses like smartphones, student loans, and car payments. Many parents are willing to help their kids even to the point of jeopardizing their own financial stability.

A Bankrate survey found that around half of parents have sacrificed emergency savings and debt payoff efforts to help their adult children, and 43% have tapped into retirement savings.

This financial support can lead to dependence, where adult children begin to expect regular handouts. To prevent this, it’s crucial to establish boundaries and encourage financial independence.

Strategies for Encouraging Financial Independence

1. Realize the Need for Change

It’s essential to recognize the importance of addressing this issue. Having an adult child living at home should be temporary unless there are mitigating circumstances, such as caring for a disabled parent.

2. Set Non-Negotiable Requirements

Your boomerang child must have a job and be earning an income. Set a deadline, such as “Moving out day is two months from now if you’re not working yet.” With plenty of jobs available, this should be feasible.

3. Establish a Budget and Financial Plan

Once your child earns money, sit down with them to create a budget and financial plan. Emphasize the importance of saving money to move out and live below their means to achieve future financial success. You can temporarily offer to match their savings to accelerate the process.

4. Encourage Emergency Savings

Teach your child to save for emergencies, ensuring their budget allows for this once they’re on their own. This will prevent them from needing to borrow money or move back in during a crisis.

5. Be a Financial Role Model

Lead by example. Demonstrate wise money management practices to instill financial responsibility in your children. Proverbs 22:6 tells us:

“Train up a child in the way he should go; even when he is old he will not depart from it.”

It’s never too late to start teaching financial responsibility. By implementing these strategies, you can help your boomerang child leave the nest successfully and achieve financial independence. Remember, the goal is to guide them toward a future where they can manage their finances wisely and thrive on their own.

On Today’s Program, Rob Answers Listener Questions:

• Why did my credit score drop after making a large payment on my credit card?
• Can we withhold tithing temporarily to focus on expenses for our son's home, or should we continue tithing even though it's a struggle right now?
• I formed a revocable trust 23 years ago after my husband died when I owned a house. Now, I no longer own the house, and the only things in the trust are my car and some investments totaling about $80,000. Is it still worth having the trust, or should I get rid of it? If I do get rid of it, how do I do that? I'm also concerned about the tax implications for my children after I die. Would it be better for them to have the trust or not?
• I'm considering adding an addition to my home, which I own for free and clear. My 401(k) has grown substantially and is now around $1 million. I wonder whether it would be better to borrow the money for the addition and deal with the opportunity cost or to set up a home equity line of credit and pay it back over the next 10-15 years like a regular mortgage. What would be the better option for me?

Resources Mentioned:

• Boomerang Kids Survey (Thrivent)
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA) or Certified Christian Financial Counselor (CertCFC)
• FaithFi App

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