Legal   |   ADV   |   Privacy   |   CRS

Financial Tips for Living with “Boomerang” Kids


One-third of adult children between the ages of 18 and 34 are now “boomerang” kids living with mom and dad, according to a study conducted by the Pew Research Center. This situation can sometimes lead to some serious family drama, like what happened when Michael Rotondo, a 30 year-old-man, was recently evicted from his parents’ house in Camillus, N.Y.

One way to minimize potential drama is to draw up a “contract” that details your adult child’s financial responsibilities if he or she moves back in with you. This can help prevent financial misunderstandings and ugly family feuds.

Drastic, Maybe, But Possibly Necessary

While this might sound like a drastic step, it can serve the dual purpose of reducing your out-of-pocket expenses while helping your adult child get back on his or her feet financially. Here are 4 tips for drawing up such a contract:

  1. Be clear about your adult child’s financial contributions. A survey conducted by Moneymagazine found that 30 percent of parents spend $5,000 or more on their adult children a year. While it’s usually OK to help out your adult kids occasionally, you should generally set some limits and make sure they know what is expected of them financially. In the contract, stipulate that your child is responsible for buying his or her groceries, gas, clothing and personal items. Also stipulate that he or she must pay all or a percentage of expenses like the cell phone bill and car and health insurance premiums, as well as an amount for room and board. This will give your child a greater incentive to work while relieving some of your financial burden.
  1. Stress the importance of paying off loans. Many young adults today are carrying heavy student loan debt. According to the College Board, two-thirds of college graduates today have an average outstanding student loan balance of $27,000. Your contract should stipulate that your adult child set aside a portion of his or her income to steadily decrease debt. If your adult child is not a college graduate, make sure he or she is paying off other debts like credit card debt. Many young adults between the ages of 18 and 24 spend more money than they make, according to a survey conducted by So talk to your child about spending habits and suggest cutting back on luxury items and other non-essentials.
  1. Encourage your child to set career goals. Include a career section in your contract that encourages your adult child to set career goals and plan for the future. Also push your child to advance at a job or internship. By helping your adult child plan a career path, you’re also helping him or her become more financially independent.
  2. Encourage your child to plan ahead financially. It’s never too early to start planning for the long term financially. Have your child put aside money in an emergency savings account and even a retirement account, if possible. This way, he or she will be better prepared for unpredictable financial losses and setbacks while also getting a jump start on retirement savings.

This will also help teach your adult child financial responsibility. While it may be more exciting to blow a paycheck on a pair of Beats headphones or a new outfit, preparing for the future is a more responsible financial strategy.

Keep Communication Lines Open

Stay on the same page with your adult child financially by frequently checking in. Have financial conversations that focus on your child’s current income and expenses, debt management and saving habits.

You should also stress that the living arrangement is temporary and include a target move-out date in the contract. You can be flexible about this if you feel you need to be — having your child evicted from your home like the Rotondos did is obviously an extreme measure. But in most cases, there shouldn’t be any misperception that the living arrangement is permanent.

Visit to see a template “Welcome Home Contract” that you can pattern your contract after.









The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC’s (“Frontier”) investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.