Bensman Risk Management, Inc.

Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS). Kestra IS and Kestra AS are not affiliated with The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C.

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Insurable Interests

Vol. 2, Issue 4December 2006


Boomerang Kids

You love your kids. You really do. But you always figured that there would come a time when they grew up and moved out on their own. Increasingly, though, adult children do not move out after college. Or they move out, but then they come back.

There are many reasons an adult child might return to the nest. Many young people are carrying significant debt when they graduate from college. They may have college loans, or they may have run up some hefty credit card debt.

At the same time, the job market can be tough for young people. A college degree may not be enough, and your graduate might decide he needs more education. This can increase his debt and add to the amount of time he cannot work full-time in his field.

Some adult children return home because of personal problems, such as divorce, illness or job loss. High housing costs, particularly in some areas of the country, may make it hard for young people starting out to buy a house or rent an apartment in a safe area. And of course, there are some adult children who move back home because it is easier.

Allowing your adult children to live with you can be a workable solution, and it can even help to grow your relationship, as you relate to each other more as adults and less as parent and child. But most experts – and most parents and children – agree that it is not a good long-term living arrangement for anyone. To make sure boomerang children move out on their own in a timely fashion, consider the following:

  • Understand why the child needs to move back home. If you are providing the housing, you have a right to know. If your child tells you she can’t find a job, talk about how she plans to look for one. If she tells you she has too much debt, talk about how she got into debt and how she can get out.

  • Set a time limit. Be reasonable, but don’t leave your welcome mat out forever. Work with your child to determine when you both think the child will be ready to move out. Although your child probably wants to move out eventually, it can be easy to find reasons not to take that step. It works better for everyone if there is a timetable in place.

  • Require a plan for meeting that timetable. For example, if your child is out of work, review with him the efforts he has made to find a job and how he can step up the search. Talk about how long he will continue to look for his dream job before he settles for something less ideal. If he is receptive, you can offer to help by looking at his resume or talking to your contacts. But don’t take over the process.

  • Charge rent. Your child is an adult, so treat her like one. You may not charge what the child would pay elsewhere, but it is important to make it clear that all the adults who live in the house contribute to the expenses of the house.

  • Set expectations. Remember that it is your house, and you have a right to set some limits. Talk about things like what chores you expect the child to do, rules for behavior, overnight guests, etc. Be fair; don’t look at the child as your personal maintenance staff, and don’t have the same rules you had years ago. Respect that your child is now an adult. But make it clear that your home is not a dorm; you expect the child to help out and to be sensitive to the needs of other people living in the house.

  • Be careful in lending money. Don’t be too quick to use your money to bail out your adult child. The child needs to learn to handle his own financial responsibilities. And perhaps more importantly, you need to plan for your own future. Don’t sacrifice your own retirement savings to support your adult children.

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