On Bauer Business Focus — A conversation on parents staying out of debt with adult kids living at home with Andrew Schneider, business reporter for KUHF 88.7 FM.
22.6 million adults between the ages of 18-35 are living with their parents. As many continue to come back home with student debt and bills of their own to pay off, parents are finding a strain on their finances as they help their children.
Financial Advisor and Senior Vice President at Morgan Stanley Wealth Management services Linda Donovan, stopped by Bauer Business Focus recently to discuss how parents can handle having adult kids living at home without going deep into debt.
“These adult children are called the ‘boomerang kids’ in that they go away and come back,” Donovan said. “They’ve graduated, but because it’s a soft economy and weak job market, they can’t find work, so they’re back with their parents racking up expenses like car payments, student loans, and cell phone bills. I tell my clients to set a budget and set a time limit of when their children can live there and when they need to move out.”
In addition to setting a time limit, Donovan suggests having adult children pay some of the bills to help lessen the burden on their parents.
“Paying utilities while living at home is a reduced cost compared to living on their own, but that gives them financial responsibility so they know what it’s like to pay rent and utilities and budgeting for themselves, as well as saving for their own retirement,” Donovan added. “I believe it’s important to set up a budget, put out a plan and then talk about how to care for that child as well.”
Click here to hear the full interview.