Living with boomerang children
By Maya Saibil • Bankrate.com

One expense many parents don't plan for is the cost of their adult child moving back home. And who can blame them? But the reality is more and more young adults are continuing to live at home or are moving back, the latter of whom have been dubbed "boomerang children."

In 2001, Statistics Canada reported that 41 percent of the 3.8 million 20 to 29 year olds in the country lived with their parents -- an increase from 27 percent in 1981.

Maybe your child has never left home, or perhaps he's moving back. Whatever the case, with the proper arrangement, having your adult child at home can benefit both of you instead of becoming a stressful situation. Here's how to make it work for everyone involved.

Don't change your plans
"Parents absolutely shouldn't have to change their financial plans to accommodate their children living at home," says Sharon Turpin, a certified financial planner in Chilliwack, B.C. You may be tempted to modify your lifestyle or postpone your retirement, but Turpin says that can be damaging to you, as well as your adult child.

One of the dangers of a young adult living at home is that he may not develop the skills he needs to become self-sufficient. And by changing your plans, you can actually perpetuate this learned helplessness. So, it's better to stick with your plans and have your boomerang child adapt to your schedule, not vice versa.

Lay down the law
Once you know your adult child will live at home, figure out how you want things to play out, and discuss this with him. "Sometimes the most successful living arrangements occur when there's a meeting of the minds right at the beginning, where the parents sit down with the children and establish some ground rules, and maybe a timetable of expectations," says Barbara Mitchell, a sociology professor at Simon Fraser University who has studied boomerang children.

Establishing a time frame for how long your son or daughter plans on staying -- and revisiting it regularly -- is a good idea, so your child realizes this is not a permanent situation, simply a short-term solution. "Really sit down and talk about what each party is expecting out of the living arrangement," says Mitchell. This way, no one is left guessing or assuming.

To charge rent ...
About half of all parents who house their adult children charge rent. Turpin says if an adult child is working, he should be contributing monetarily to the household. "The parents are probably at a stage in their life where they are putting away for retirement, so the added expenses of having their children at home are going to hurt them in the end."

Turpin says parents often don't realize how much more it costs them when an adult child lives at home. To offset those costs, calculate how much rent you should charge your child based on housing, laundry and food costs.

If you don't need the money but still want to teach your child to budget, collect rent from her regularly and stash it away somewhere to gain interest. Then, when your child moves out, surprise her with that lump sum of money to put toward something like a house or a car.

...or not to charge rent
Lianne Barski, of Montreal, lived with her parents until two weeks before her 30th birthday, minus the year she spent in Australia in 1999. She never paid rent while at home because her parents didn't need the money, and they didn't think she needed to pay rent to learn the value of money.

"We didn't feel taken advantage of at all, and we never considered her living at home as mooching," says Lianne's father, Mike. He's happy he and his wife could help their daughter by giving her the opportunity to save money so she could do things she would not have been able to afford otherwise.

For example, in 2002, Lianne took a five-month trip to Asia with boyfriend Miki Harrar. "I wouldn't have been able to afford the trip if I had been paying rent," says Lianne of her $7,000 adventure.

Harrar, now 31, moved back to his parents' home in 1996 after university. He lived there rent-free for six years before going to law school. After his undergraduate degree, he had debts to pay off, and living at home while working gave him the opportunity to do that, as well as to save money for travelling and future schooling.

"I might not have been paying rent, but that doesn't mean there was no cost to staying at home," says Harrar. "There were times when it was tense, and my parents wanted more out of me than I was willing to give."

But he adds that if his parents had thought he was taking advantage of them or spending irresponsibly, they would have said something. Overall, he is pleased with how things worked out. "It definitely allowed me to put away a good nest egg."

Stick with your decision
Whatever you decide about how much your child will contribute to your household while she lives there, stick with it -- even if you face resistance. In their book "Parents' Work is Never Done: Helping children from 16-30 grow toward psychological well-being," Drs. James M. Haines and Margery A. Neely write, "Although weaning a grown child from financial dependence can prove trying, parents are encouraged to make their decisions free of guilt, realizing that grown children must learn to be independent if they are to become self-actualized, productive adults."

Mitchell agrees, saying, "In a minority of cases -- about one out of four -- it can make the relationship between the parents and child worse, particularly if the parents feel they're being taken advantage of, or they feel that the child is not showing any definite signs of moving out." But in most cases, it's a positive experience for parents and children.

Maya Saibil is a writer in Toronto.