Safeguarding Your Finances While Guiding a Boomerang Child

By Marc C. Shaffer

The idea of a “boomerang” generation has been around for a long time, but a new economic situation could be fueling another wave of boomerangers. Sure, there are still children who graduate and move back in with their parents right away. But while many adults are still recovering from pandemic-era job loss and financial recovery, the housing situation of low inventory, high prices and high interest rates is not helping. This could cause children of any age to boomerang right back into the nest.

According to U.S. Census information, 56% of adults 18-24 lived with their parents in 2022 as did 16% of adults 25-34.

The idea of boomerang children being a burden on parents depends on various factors and how the situation is set up from the beginning.

In some cases, the situation could benefit both parties. If parents are in need of extra care or would benefit from sharing expenses, a child who could provide either would be helpful. It could also reduce the physical stress on parents in keeping up the household and provide companionship. The sharing of expenses could allow parents to save additional funds for retirement or future goals and the child could also be saving toward the future instead of renting or owning a place beyond their current means.

In other cases, parents who do not set boundaries and have children who don’t contribute to expenses could risk their financial security and retirement. With less time due to age to recover any financial losses, it is critical to protect their financial stability during this time.

Whether your children are moving in, or just asking for help financially, there are steps to help protect your finances:

Communicate and Set Clear Expectations

Establish boundaries both financially and for the duration of their stay. Create a plan and a timeline for covering expenses, saving for the future, and preparation for moving on which could include a move-out date.

Create a Written Agreement

A formal agreement could outline rent or other financial contributions and guidelines about the living arrangement. This could help clear up any miscommunication or misunderstandings in the future.

Know Where You Stand®

Understand your current budget, cash flow and other financial information. Make a plan to protect your finances and if needed, know at what number your aid to your children starts creating a financial burden on yourself.

Encourage Financial Independence

Even while living in your home, children can maintain financial independence. Their living with you does not mean you have to cover any of their expenses. If you are helping with expenses to alleviate a burden, work together on a plan for when the expenses can be switched back to the child AND eventually repaid to the parent.

As a parent, the support you give your child by letting them move back home can be so valuable to their future, but don’t let it be at the expense of your own. Every situation is unique, so adapting the tips above to your situation could protect both you and your child in the long run. Set boundaries and don’t let your generosity become dependency.


Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on December 5, 2023 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager. 

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