More Adult Children are Moving Back with Mom and Dad

January 31, 2005 | By Sheba A. Wheeler

Baby boomers, don’t be so quick to convert your child’s bedroom into a library.

That knocking you hear at the front door might be your 20-something son or daughter hoping to exchange a dorm room or cramped apartment for former digs at home.

One reason: The economics of being a young adult are tougher now than when empty-nesters were the same age, generational experts say.

“The issue of money has become the main problem for today’s graduates the way race, gender and immigration were issues for the boomers,” says William Strauss, co-author of “Millennials Rising: The Next Great Generation” (Vintage, 2000).

Sociologists now discuss a new stage of life between adolescence and adulthood, a hunkering-down in which “boomerangs” and “twixters” postpone marriage and children for job-hopping to fortify resumes and hoard savings.

Many are accomplishing this by moving back in with Mom and Dad, often more than once, taking advantage of free rent and home cooking. Almost 16 million families had at least one child older than 18 living at home in 2003, up 7 percent from 1995 and up 13 percent from 1985, according to the Census Bureau’s American Housing Survey.

When Mandy Jakse, 28, endured a painful breakup with her live-in boyfriend, she turned to her family in Parker, Colo.

“I moved back home because I wanted a month or two to determine where I wanted to go next,” Jakse says. “I tried to move out many times, but my parents didn’t think it was a good idea for me to be spending $800 on rent when I could pay off my debt and be able to buy.”

Many 20-somethings are unemployed or underemployed because of a less-than-robust economy and a tight job market. Most graduates owe an average of $20,000 in student loans—nearly double what was owed in the mid-1990s—saddling them with debt before they receive their first paycheck. The average price for a modest home today is nearly eight times the annual income a recent college graduate receives.

Students increasingly turn to credit cards for survival and play. The median card debt for undergraduates has risen by 32 percent since 1998, to $3,730, according to a Nellie Mae study. It’s even more for graduate students, up 59 percent to $7,831.

ADULTHOOD DELAYED

Sociologists now define 26 instead of 21 as the age most people become adults because it’s taking that much longer to become financially independent, says Abby Wilner, the 29-year-old co-author of “Quarterlife Crisis: The Unique Challenges of Life in Your 20s” (Penguin, 2001).

Few of today’s graduates can afford a house, are ready for marriage or have a solid career plan.

“And that’s OK,” Wilner says. “It’s great that people are exploring different opportunities, getting a taste of different career paths. But the consequence of having more personalized, tailored career plans is that it takes longer to establish yourself.”

Josh Mishell, 26, is thankful his parents were understanding. He moved home twice before he was able to buy a condo near the University of Denver in November.

After he graduated from college in May 2001, Mishell lived at home for a few months before he landed his first job as a graphic designer. Boredom nudged him to Vail, where he skied and designed advertisements for the Vail Daily News. He ran up credit-card debt trying to maintain a pricey lifestyle, then the paper let him go.

It was back to Mom and Dad’s. He used the next seven months to square away his debt, update his portfolio and interview for jobs before he became creative director for Tinaglia Advertising.

“My parents went through this with both of my brothers,” Mishell says. “They said to stay for as long as I wanted because they knew I was set on not taking another boring job just to pay my bills. I felt that if my parents would allow me to live at home, I should take that chance for something greater.”

It’s not new for parents to try to give their children every advantage, Strauss says. What complicates the issue is boomers have more money to rain on their kids than generations before.

And young people get along better with their parents, Strauss says. They share values, cultural tastes. Generations past might have been more inclined to believe that at age 18, children were on their own. But the relationships youths develop with their parents today create an environment where it’s OK to return to the nest.

“We should take pride in this,” Strauss says. “This isn’t a basis to criticize young people or their parents. The families who make accommodations to try to help their kids have a better life are doing a good thing.”

The issue facing affluent boomer parents is how to help their kids while still creating a self-reliant individual, he says.

It’s an ongoing debate in the Clouse residence.

Mac and Leslie Clouse’s son, Eric, hopes to become a radio programmer. He’s paying his dues, working three jobs, none offering benefits.

His parents are footing his health insurance bills. That sounds typical, or at least it would if Eric were just out of college. But Eric is 27.

“If we stop helping him, tell him to give up his dream and pick something more realistic with a traditional living wage, there’s no guarantee he will be successful,” says Mac Clouse, 56, director of the Reiman School of Finance at the University of Denver. “Eric has passion and focus for what he wants to achieve. As a parent, I want to support that.”

Leslie Clouse, 56, agrees her son should have medical benefits. The elementary-school teacher says she and her husband also help pay rent for their daughter, 27, a special-victims advocate.

“Yes, it is more expensive for youth today, but at the same time they seem to eat out a lot and don’t have the ability to wait for things,” Leslie Clouse says.

“I’m not sure the line between want and need is delineated for this new generation. It’s really hard for me to watch some of these young people say they just don’t have the money. They do. They can make that trip to New York, but they can’t pay the $50 a month for (teachers) association dues.”

TIGHT REINS

Some cynics say parents dug their own graves by coddling their children.

“I see a lot of peers in my neighborhood that keep a tight rein on their children, protecting them from the real world,” says Gary Sidder, president of Life Transition Planners, a financial planning and money management firm in Littleton, Colo. “The kids aren’t as prepared to live out there: They can’t take care of money, feed themselves or even do their own laundry.”

Anecdotal research collected by Robert Wendover, director of the Center for Generational Studies in Aurora, Colo., shows boomer parents may prevent their children from growing up by not allowing them to learn from mistakes.

“These are the kind of parents who call the principal to get the kid off when they are in trouble,” Wendover says. “These parents talk teachers into giving their kids a higher grade instead of telling them to do better next time. They hire lawyers to get their kid out of a ticket even if they were going 25 miles over the speed limit.”

Sometimes, parents hand out money to assuage the guilt of not being involved in their children’s lives or to manipulate and control, says Gary Buffone, a financial parenting psychologist and author of “Choking on the Silver Spoon: Keeping Kids Healthy, Wealthy and Wise in a Land of Plenty” (Simplon, 2003).

“The problem comes when parents overemphasize things and money and use it as a way to relate to their kids.”

Some parents can’t seem to cut the apron strings, even to their own detriment, says Kevin Stockton, president and chief executive of Legacy Financial Services, an investment management firm that works with retirees and pre-retirees.

“I’ve seen some where parents will put up collateral at a bank for their kids to take out a loan that never gets repaid,” Stockton says. “Many parents are reluctant to look at it this way, but they need to protect their interests, as well…. They have to cut the reins.”

Parents like Sharon Lechter, 51, have learned how to help without hindering.

As the founder of the Rich Dad company and co-author of the international best-selling “Rich Dad Poor Dad” series, designed to foster financial freedom, Lechter thought she had taught her children life skills.

But three months after her eldest son went off to college, he had blown a $2,500 savings account and had $1,000 in credit-card debt.

“As parents, we were shocked and horrified,” Lechter says. “We refused to bail him out, and for a year he had to take all the collection calls and watch his bad decisions affect his credit rating.”

A year later, she gave in, paid off his balance and set up a repayment plan. It took him four years to pay her back and get his credit into shape.

“We could have prevented all of this by paying off his debt when it first happened, but I don’t think he would have learned the lesson,” Lechter says. “But if you give your children too much assistance, you disable them and create a level of expectation, entitlement. As long as you have assistance with a goal in mind that a child can achieve, that’s not coddling. That just education.”

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