Boomerang kids - The adult children moving back home
Ingrid Laurence interviews finance expert Angel Zhong for Seniors Home and Contents Insurance.
The cost of living is still skyrocketing, so experts predict more adult children will move back to the family home. “The phenomenon is often referred to as ‘boomerang kids’ or ‘failure to launch’,” says Angel Zhong, Associate Professor of Finance at RMIT University. “My research shows that young Australians find it increasingly more difficult to afford their own home, and as a result, they choose to live with parents.”
The return of adult children can be welcome, especially when beloved grandchildren arrive in tow. Others, however, may find it a drain on their finances and can put a delay on their retirement lifestyle plans.
The Australian Seniors Empty Nesters Report found that feeling upset when children leave home is more common for the women among us, who are more likely to see our children moving out of home as a sad occurrence compared with their male counterparts (49.4% vs 31.4%). So, maybe the solution is to have some rules in place for if and when boomerang adult children do want to return home.
Regardless of your personal situation, Professor Zhong says there are five key matters everyone should consider before family members move in.
Five tips from Professor Zhong
1. Assess your own financial situation
This includes evaluating your retirement savings, income sources and budget. It’s essential to have a clear understanding of how supporting additional family members will impact your own financial wellbeing and lifestyle.
2. Establish boundaries
Open communication is vital. Discuss expectations with the returning family members about their financial contributions, duration of stay and household responsibilities.
3. Budget for increased expenses
Consider additional costs such as food, utilities and potential medical expenses, to ensure you can comfortably accommodate everyone without jeopardising your financial stability.
4. Draw up an agreement
It’s crucial to come up with a clear agreement on costs, rent, cooking and responsibilities. The clarity helps you plan your budget effectively, and setting expectations and discussing these matters openly can prevent potential conflicts and financial strain down the road.
5. Seek financial advice
A financial advisor can help create a sustainable plan that accommodates the needs of the entire family.
An award-winning RMIT finance researcher who specialises in empirical asset pricing and investor behaviour in financial markets.
Having your adult kids move back home can mean it’s even more important to look after your home and contents. Consider protection with Seniors Home and Contents Insurance.
22 Jan 2024