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Moving back in with mom and dad: a survival guide

A sour economy, depressed job market and some big, big debts are shoving many college grads right back into the nest.

Fifty-seven percent of college students plan to move back in with their parents after graduation according to a MonsterTrak.com survey in March.

This could be an awfully bumpy year for a whole lot of American families.

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No self-respecting, independent-minded twenty-something is going to feel thrilled about moving back into a bedroom they left as a teen. Their return is sure to put some kind of strain on the household, whether financial, emotional or both.

Here are some tips for surviving a grad's move home.

First off, everyone needs to acknowledge that a lot has changed since the returning grad last lived at home. The biggest change: That teenage son or daughter has morphed into a 22-year-old adult.

"These are not your children anymore," says Robert Billingham, associate professor of human development and family studies at Indiana University. "Try to look at them as borders. How would you arrange the world if a stranger was living with you?"

Some of the old house rules, such as curfews, will probably have to go.

"Somebody who is 22 to 24 may be resentful of a parent who says 'We'll see you before midnight,'" says Nancy Granovsky, a professor and family-economics specialist at Texas A&M. "You can't do curfews. This is an independent adult who happens to live with you."

Returning grads for their part should view their parents as benevolent landlords.

"They have to redefine their role with these people in whose house they're moving," Billingham says. "What would you want from a landlord?"

It's important to talk everything out. Then, parent and grad can sit down and hammer out some new house rules together, adult-to-adult. It's a good idea to put everything down in writing, like a lease or a contract.

Sit down at the negotiating table
Here are just a few of the things a grad will need to sort out with his or her parents and new landlords:

  • Will you pay rent? How much?

  • Will you have access to the family car?

  • Will you be expected to pay for food or phone expenses?

  • Will you do your own laundry?

  • If you don't pay rent, how will you contribute to the household?

Grads should share any financial worries and concerns with their parents as well. It is, after all, the main reason you moved home.

Your parents may be able to offer tips and advice. Anyone with children knows a thing or two about managing debt.

Set a deadline. Will you be ready to move out in six months? How about a year?

"Set a deadline so there's some kind of goal in sight," says Jason Anthony, co-author of Debt-free by 30 Practical Advice for Young, Broke and Upwardly Mobile. "Because you run the risk of quiet resentment simmering."

By giving yourself a deadline you'll show your parents that you're serious about improving your financial situation on your own and you're not just dropping out at their place waiting for the economy to improve.

A deadline will also keep you motivated. There's no class schedule or syllabus to keep you on track in the real world. You've got to do it yourself.

"If a kid knows he has to be out in six months or 12 months he'll work on addressing the debt," Anthony says. "The goal should be to get on their feet and get out."

The more things parents and graduate talk about and negotiate and put in writing, the better off everyone will be. But it won't be all smooth sailing.

Some tension within a family is unavoidable. And you can't outgrow your family no matter how hard you try or how grownup or independent you may feel.

Billingham, who is in his 50s, describes a visit to his parents' house this way: "It only takes four or five days for me to start to feel like I'm 12 again."

Grads who move home should brace themselves for some serious time warps. Your parents will find a way to make you feel like a kid again, no matter what you do. It could happen before you've even unpacked a bag.

"Families are simply that powerful," Billingham says. "The way you minimize it is through discussions and contracts and negotiations."

Another important strategy: give each other plenty of space.

"I would also strongly suggest not being in your parents' face every minute of the day," Anthony says. "It's an adjustment for them, too."

Control the spending habit
One of the biggest adjustments for the returning grad is breaking the spending habit. Student loans and credit cards make borrowing your way through university a snap.

Paying off all that debt won't be. Reducing debt takes a lot of hard work and discipline. The sooner you dive in and get started, the better off you'll be. So take a deep breath and get going.

Start by tallying up your debt --- every single penny of it, every student loan, every credit card bill. Make note of how much you owe and at what interest rate.

You'll want to mow down that high-interest credit card debt as soon as possible.

"Always pay off your credit cards first because they're going to have higher interest rates," Anthony says. "Pay the minimum on student loans and really attack the cards."

Start with the credit card with the highest interest rate first. Pay above and beyond the minimum payment every month. Once that balance is paid off, jump to the card with the next highest interest rate.

This article from Bankrate.com offers a number of tips and strategies for paying down card debt. Whatever strategy you choose, the important thing is to keep at it.

And you won't make much headway on your card bills if you continue to charge away, so put your credit cards on ice indefinitely.

Ready for some good news? The interest rates on student loans have never been lower.

On July 1, the interest rate on federal Stafford loans dropped from 4.06 percent to 3.42 percent, the lowest rate in the 36-year history of the student loan program. That's great news for all student loan borrowers.

The rock-bottom interest rates remain in effect through June 30, 2004. All you have to do is sit back and enjoy the cost savings.

Wish there was a way to make those super-low interest rates last beyond next June? Consider a federal consolidation loan.

A consolidation loan locks in a single rate for the life of a loan. The rate is based on the interest rates on loans you already have.

It's best to consolidate loans when interest rates are as low as they are now.

Sock away some savings
Once you've knocked down some debt, the next step is building up some savings. Call it your moving-out fund. Making your way in the real world will be a lot easier when you have a little cash stashed away and you've got your debts under control.

Anthony knows this from experience. When he was in his mid 20s, raging debts prompted him to move in with his grandparents.

For four long months, he worked and attacked his debts with abandon and did little else.

"I used the time very wisely," Anthony says. "I had no life but I had a better life when I left.

"You just have to remind yourself every day that it's temporary."

His advice for twenty-somethings returning to the nest?

"Go to work. Come home. Eat where the food is free. Rent movies," Anthony says. "The best way to get through it is to think of the better position you'll be in once you're released from the house."

Remember, you won't have to live with your folks forever. And you will land a good job if you keep trying. You can knock down your debts to manageable levels.

Heck, the economy is bound to pick up one of these days.

"Sometimes people start to feel as if the situation is hopeless and it just is not," Billingham says. "When the economy improves and it always does, there will be ample opportunity to move out."

-- Updated: May 13, 2004




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