Last year, right around college graduation time, the Philadelphia-based consulting firm Twenty Somethingreleased this shocking statistic: 85 percent of college grads were moving home. That was nearly 20 percentage points higher than the last time I'd looked at the same measure, only four years earlier. For those of you who need proof that your young adult kids are trying to launch their real lives in the face of huge financial challenges, I'd say: Look no further. These kids have now officially entered "adultolescence" - a phrase coined by parenting experts for the frustrating phase that can span five years between the time education ends and adult life (as you know it) begins.
The question that follows is, of course, what do you do about that? How do you help your kids prepare so that when the economy turns for the better wherever you happen to live, they've got the best shot of making it on their own? And I'd say, you start with a conversation. A business conversation. Yes, you're still the Mom (or the Dad), but for the purposes of this talk I'd remove that hat and try to talk to your offspring as if he or she was the child of a friend who needed financial advice. This is important because, particularly if they're living at home (but even if they're not but still need your financial support) you want to emerge with a plan to transition them off your payroll in the future. Here are some questions/talking points to get you started.
What are your plans for after graduation? If you have a child finishing school in the next few years, don't wait until they order their cap and gown before talking about what life will likely look like. Depending on your child's major, it's probably been clear for a while if he or she will be able to earn enough to live independently after school - and what the job market looks like for kids with that specialty. You may suspect your child will move home. Do both of you a favor by broaching the subject. Once it's decided you can talk about specifics.
This is what I'll expect from you. . . You'll need to cover two things in this part of the talk, expected behavior (that's your call) and a household financial contribution. I fully believe there should be one, but just like you, your adult child likely has fixed costs that must be covered first. These include student loan payments, transportation expenses to and from work, food outside the house and a cell phone. Once they're satisfied, take a look at how much is left from your child's pay and consider asking the child to contribute for rent or cable/Internet or groceries. They need to do this because a) they need to start getting a taste of how much it will cost them to live independently and b) because you want them to have a financial incentive to strive for that apartment of their own. And if it's too nice and cushy (and free) under your roof, they won't have it. Note: I know some parents who can't bear the thought of charging their kids rent. If you're among them, one nice thing to do is to put the money they pay you in a separate account then give it back to them as an emergency cushion when they finally do leave home.
What do you think you could do to earn money until you find your dream job? Unfortunately, many of the 85 percent of adult kids moving home aren't underemployed - just not earning enough to make it on their own - they're unemployed. If your kid are in this group, it's important that you emphasize that even though they haven't found work Nirvana, they're still expected to contribute, even if it means working for minimum wage as a part-time nanny or golf caddy for a while. And they need to approach getting a job, as a job. Which means up, dressed and out of the house for the workday.
Let's talk about what I did wrong. Admitting your own mistakes to your adult children is one way to make these conversations feel less like lectures and more like you're really trying to help. When I have these talks with my kids, I'll be sure to address the massive credit card debt I accumulated shortly after getting out of school (half a year's salary), how I got rid of it (with a second, part-time job) and how I wish, wish, wish I had started saving earlier and had put away 10 percent of everything I earned routinely over the years.
What can I do to help? Finally, leave the door open. You want your kids to be able to come back to you both for counsel but also if they feel they've taken a financial misstep and need help - with either information or cash - digging out. Let them know you may not always be there with a checkbook and a pen. But you'll always be happy to listen.