Mother and daughter sit close together by the counter

When you moved your child into his or her college dorm room or first apartment, you probably shed a tear or two as the reality of the empty nest sank in. At the time, you never expected they’d move back home.

But a few years later, your child may be looking homeward again. As much as you adore your (not so) little one, the possibility that they might be calling your house “home” again is not something you necessarily expected. And you’re not alone — nearly two-thirds of Americans say that as much as they love their adult children, they don’t want to live with them.

When many young adults (those ages 18 to 34) face low wages or work without benefits, high rent payments, and seemingly mountain-sized student loan debt, what can you do to ensure your child stays on her feet? How can you help him find and maintain financial freedom? And if they must move back in, how can you navigate the situation with compassion and without feeling like you’re being taken advantage of?

Provide financial support from the sidelines.

When your child is already out of the house and living on their own, you can still take steps to avoid them boomeranging back home — without having to explicitly financially support them.

Continue to support healthy money habits and offer guidance, if necessary. This could mean working with them to create a student loan payback plan, providing assistance in their job search, helping them stay on track with a budget, or ensuring they’re paying bills on time.

Of course, you want to make sure they’re still independent — so avoid micromanaging or nagging and lean on technology to help you out. Smart savings tools like automatic recurring transfers into our Online Savings Account allow your child to set it and forget it to build savings. And automatic bill payment would also help them avoid late fees.

Lastly, keep your peace of mind by preventing surprises. Openly talk about finances with your child. Just be sure to respect their privacy and allow them the independence to make the final decisions when it comes to their own money. We know it can be difficult to remain silent if you disagree, but is a bad money move worth damaging your relationship?

If they come back home, set expectations.

Watching your child struggle to keep up in an economy that’s been harsh on Millennials can be tough. As a parent, your instinct is to come to their rescue. And sometimes, that means allowing them to move back home in order to get back on their feet.

If this is your reality, don’t panic — it doesn’t have to be forever.

While financial conversations can be tricky, a free-loader situation may be much more painful on your wallet (or retirement fund) and your child’s long-term well-being. So, if your adult child is considering a move back home, it might be helpful to set ground rules and establish healthy boundaries. These could include:

  • A timeline for their stay: Work with your child to decide on an appropriate length of time for them to live at home. This may be a specific number of months or a year, until they have a certain amount of savings, or have repaid a specified portion of their loans, etc.
  • An agreed-upon rent payment: Charging rent is a personal choice that will likely be affected by your child’s reason for moving home. (You may forgo this if they’re living with you to save money for a down payment on a house or if they’re saving for grad school, for example.) Rent can help your child become accustomed to paying for regular expenses and encourage positive budgeting behavior, while establishing that this isn’t a free-ride situation. To avoid confusion or misunderstanding, consider handling the payments formally with a written contract.
  • Employment expectations: If your child doesn’t have a job (whether they were recently laid off or fresh out of school), help them develop a roadmap for finding one. If they’re struggling to enter a certain career field, for instance, encourage them to find another source of outside income while they continue to search, or have them take up a more helpful role around the house.
  • Household rules: You set rules when they were little (no running on the stairs, TV off after 9 p.m.), and you can set them now. While you want to treat your adult child like an adult, they are living in your home and should respect your boundaries and expectations.
  • Other financial terms: This is likely a time when your kid is working to get on their feet so they can live independently. To make that a reality, they’ll probably need to cut back on certain wants. As a parent, it’s important to not become the bank (so to speak), so consider establishing guidelines around their spending and how much you’re willing to fund their expenses.

Instill positive financial habits early.

If your kids are still young, you can help prevent boomeranging from becoming a reality. Talk to your children while they’re younger about forming good financial habits, like budgeting, saving, and living within means.

One way you can teach your kids financial skills is by having them create a weekly budget that you monitor — start simple (for example, saving up for a single item), but as they get older, you can teach them more about budgeting methods, like the 50/30/20 plan. You might open a custodial brokerage account, so they can learn about the stock market and practice investing under your watchful eye. You could also consider opening a joint credit card or co-signing a car loan to help them build credit while also learning about interest rates and the importance of repaying debt.

The hands-on experience teaches them money-handling skills, how credit works, and the power of investing while the stakes are lower than when they’re living on their own.

Whether your children are preschoolers or high schoolers, it’s never too early or too late to teach them about money and the best way to handle it. And considering they receive most of their financial education from you, setting a positive example in front of them can go a long way when they fly the coop.

The Millennial generation is moving back in with their parents far more than past generations, but that doesn’t mean it’s an easy or ideal situation. As a parent, you might feel like you have little control over the situation — but you do.

By teaching your children good money habits, providing guidance when they go out on their own, and setting fair and healthy boundaries should they move home, you can keep your adult children from becoming long-term boomerangers.  Even if deep down (although you’d never admit it), you’re happy to have them home again.

Are your adult children moving in? Don’t let the change affect your retirement savings.

Learn more.