Cheryl J. Sherrard, CFP was quoted in a September 21st article in the Wall Street Journal, focused on what parents should know, and do, about the financial challenges of boomerang children.
More millennials are spending early adulthood in the same place where they spent their formative years: in their parents’ homes.
It’s crucial that both parties understand the financial implications of this homecoming. For parents, a child’s return often means a greater financial burden, just as the parents may be struggling to meet their own savings and retirement goals. It also can make it more difficult for the millennials to acquire the financial skills they’ll need later in life.
According to a recent study by PEW Research Center, the percentage of 18- to 34-year-olds living with their parents is higher today than it has been in decades. Currently, 26% are back in the nest, up from 22% in 2007. The rise has occurred among both high-school and college graduates, and has continued since the recession’s end, despite the fact that millennials are earning more and have a lower unemployment rate than they did a few years ago. The following are excerpts from the article.
Still, parents may not be considering the risk to their retirement savings when they continue to support adult children, says Cheryl Sherrard, director of financial planning at Clearview Wealth Management in Charlotte, N.C.
Deadlines and discussions
If a child fails to find a job within a reasonable time, parents and child should discuss why that happened. In many cases, adult children can benefit from parents coaching them in job-search skills, like networking.
If a child is truly unmotivated, advisers say parents can take more drastic steps, such as cutting them off the family cellphone plan or car-insurance policy. “The inability to get around or text one’s friends,” says Ms. Sherrard, “may prod someone to at least find a temporary job.”
If you have a Wall Street Journal subscription, you can read the entire article here.