Financial experts say parents should be asking adult children who move back home to pay rent, even though most are only returning to the nest in order to save money.
Currently, around one-third of U.S. adults aged between 18 and 34 live with their parents, up from 26% in 2005, according to Census data.
“By collecting rent, you’re teaching your kids to budget, to prepare for life,” Kim Luu-Tu, a private wealth adviser with Ameriprise Financial who specializes in generational wealth planning, told the Wall Street Journal.
Susana Fonticoba of East Hanover, New Jersey, told the Journal she decided to let her daughter move back in, together with a friend, following their graduation from college. Neither could earn enough money to support themselves fully, and so Fonticoba converted a sunroom into a living space for the pair to move in to. She then created a rental agreement that stipulated her daughter and friend must pay an agreed portion of their earnings towards their keep.
Jason Houle, an associate professor of sociology at Dartmouth College who has researched so-called “boomerang children”, said adults who return to live with mom and dad are often labeled as “lazy” or “entitled”. But Houle disagrees with that label in general, saying it’s mostly “unfounded” when one looks at the data. He notes that most boomerang kids only stay with their parents for a short period of time before setting off on their own again.
“Most people who end up on their parent’s doorstep tend to do so for a year or two,” Houle said. “They’re just getting back on their feet.”
The top reason that young people move back home is to save money, according to a report from the Federal Reserve’s Survey of Household Economics and Decisionmaking.