Money Tips for Boomerang Kids and Their Parents

It’s a bad time to be a brand-new college graduate, as the job market is incredibly hard to crack these days. But if you’re having a tough time finding employment and paying down student loans, there is a place you can move to that offers below-market rent, home-cooked meals and a full-time housekeeper. The catch: It’s your old house, and your parents are the landlords.

Don’t feel bad if you’re moving back to the house you swore would only visit after you left for college. You’re not alone. According to AARP, 18 million adults are living with their parents, from recent college grads to thirtysomethings. While you’re not 16 anymore, and you may own your own car now, remember that you’re still living under someone else’s roof, and you’re subject to their rules. “Moving back home is a good way to save up while you look for a job or pay from the bills,” says Elina Furman, author of Boomerang Nation: How to Survive Living With Your Parents the Second Time Around. “But you don’t want to make it a permanent living situation.” And neither do your parents, probably.

So how do you make the move back home stress-free and temporary for all parties? Furman offers tips below that can come in handy for both boomerangers and their parents.

Have a reason for coming home

“When you’re deciding if you need to move back home, it goes beyond how much money you have left in the bank,” says Furman. “If you have credit card debt or big school loans, you’ll need some time to pay it off. The question is, do you want to pay it off over the long term or pay it off now?” if you opt for the latter, and you’re short on money for rent and basic needs, moving back home is the obvious choice, so you can build up cash to pay off debt, buy a home, whatever your goal.

Set a timeframe

You need to know how long it will take you to reach those goals. Without a timeline, it’s easy to put off the job and house hunt, leading you to procrastinate and live at home even longer. You can set up a customized debt payoff schedule or a savings plan using the Goals feature on Mint.com.

Break it to your parents

Although they probably are aware already that you need to cut costs – and they may have have made the first move by asking you if you want your old room back, you should still sit down and discuss your goals and timeline with Mom and Dad  before moving in. “Give them estimates – how long you want to live at home, how much debt you want to pay down, descriptions of your personal and professional goals, and how long it will take to meet them,” says Furman. “Make them understand your reasons for coming home, and how you’ll take advantage of your time there, and they’ll be more welcoming.”

Create a lease

It’s not a good idea to mooch off your parents. To earn respect as an adult member of the household, you should offer to pitch in financially. Furman recommends creating some form of contractual agreement, like a monthly rent and what portion of household costs you’ll cover.

If you have a job and are making money, offer to pay some rent, say 10 percent of your paycheck. (Many parents set that money aside to help kids pay loans, credit card debt, a rental security deposit or a down payment when they move out). You should also help pay some of the utility bills, cable and Internet. Definitely cover your own cell phone. Pay for your own gas if you’re using the family car. If you’re not bringing in a paycheck, offer to pay your rent by doing household chores, such as cooking, cleaning, running errands and, yes, mowing the lawn.

Discuss the non-financial matters

Your parents may have expectations of how you should be a model tenant – and yes, that may include a curfew. You should definitely bring up the non-financial expectations before moving back in. Is there a curfew? Are there rules about drinking? Can you have overnight guests? What about if you have a significant other? To make sure your privacy is respected, and your parents’ wishes are respected as well, write these terms and conditions into your lease.

Start saving more, spending less

To make sure you’re meeting your goals within the set timeline, first thing to do after you’ve unpacked your bags is to sit down, figure out your monthly expenses, create a budget and, most importantly, stick with it. Again, you can set up an account on Mint.com to track your spending and see where you might be able to trim the excess. It’s common for many boomerangers to spend more money after they’ve moved back home, on everything from an SUV to a new shoe collection.  Resist, and stay focused on your goals. That’s where Mom and Dad can really help out, says Furman. “Parents can help make sure you’re meeting those goals. They should sit down with kids every month for a progress report on the budget, career goals and whether enough money is being saved away.”

You may consider it annoying if your mom keeps asking whether you’re sent out resumes or made an appointment with that career counselor her friend recommended. But remember your parents have your best interest at heart, they’re your best cheerleaders, and they want to help you  succeed in the real world – for your sake, as well as theirs. They’re giving you a chance to regain your financial footing, so do your best not to waste it.

Vanessa Richardson is a freelance writer in San Francisco who writes about small business and personal finance.