ADULTS MOVING BACK HOME
WITH THEIR PARENTS ISN'T NEW,
BUT WE HAVE SEEN A RESURGENCE
DURING THE CORONAVIRUS PANDEMIC.
PRINCIPAL PRESERVATION SERVICES
HAS TIPS ON HOW PARENTS CAN
HELP THEIR ADULT CHILDREN
WITHOUT JEOPARDIZING THEIR
RETIREMENT.
MIKE AM A WHITE OUR ADULT
CHILDREN MOVING BACK IN WITH
THEIR PARENTS?
WITH HIS WHOLE CORONAVIRUS
PANDEMIC, IT HAS REALLY
AFFECTED OUR LIVES IN
UNIMAGINABLE WAYS, THINGS WE
COULD NOT FATHOM BEFORE.
RIGHT NOW, HALF OF MILLENNIALS
HAVE EITHER LOST THEIR JOBS OR
HAVE LESS INCOME SINCE MARCH.
ON TOP OF THAT, THAT YOUNGER
GENERATION, THEY HAVE LESS
MONEY IN SAVINGS, THEY HAVE
COLLEGE DEBT THAT COULD BE AS
HIGH AS $30,000 OR MORE, RIGHT
NOW, 27 MILLION ADULTS HAVE
ACTUALLY MOVED IN WITH THEIR
PARENTS RECENTLY.
IT IS A TOPIC WE JUST REALLY
NEED TO ADDRESS BECAUSE OF
THESE ISSUES.
SO WHAT SHOULD PARENTS BE
DOING WHEN IT COMES TO MANAGING
THEIR FINANCES IF THEIR ADULT
CHILDREN HAVE MOVED IN BACK HOME
?
RIGHT OFF THE BAT, GET YOUR
EXPECTATIONS RIGHT OFF THE BAT,
CLARIFY YOUR EXPECTATIONS.
RIGHT NOW, TWO THIRDS OF THE
PARENTS ARE PAYING FOR SOME OF
THEIR CHILDREN'S FINANCES, THE
ONES WHO ALREADY HAD MOVED BACK
HOME.
IF YOU HAVE, RIGHT OFF TO START
THIS LITTLE TALK OR A SIGNED
AGREEMENT BETWEEN YOU AND YOUR
ADULT CHILDREN, WHAT ARE YOUR
EXPECTATIONS, ARE THEY GOING TO
BE ABLE TO PAY FOR SOME OF THE
RENT, PAY SOMETHING ON THE
UTILITIES OR FOOD, WHAT IS IT?
WHEN IS THE MOVEOUT DATE?
THAT IS IMPORTANT AS WELL.
I'VE HEARD TOO MANY STORIES OF
THIS INDEFINITE END TO THE
CHILDREN MOVING HOME.
THEY THOUGHT IT WOULD BE A
THREE TO SIX MONTH ORDEAL, IT
HAS TURNED INTO A TWO OR THREE
YEAR ORDEAL. PUT THAT INTO THE
AGREEMENT AS WELL.
I THINK IT IS IMPORTANT TO PUT
THAT IN WRITING, ALSO AS
PARENTS, IS A GOOD TO LET YOUR
CHILDREN KNOW WHAT YOU'RE
SITUATION IS WITHOUT HAVING TO
GET DETAILED NUMBERS.
MAYBE WHEN THEY MOVED OUT YOU
ARE WORKING, NOW YOU ARE
RETIRED AND NOW YOU ARE ON A
FIXED INCOME AND YOUR INCOME IS
LOWER.
YOU HAVE TO LET THEM KNOW, YOU
DON'T HAVE THE ABILITY TO DO
WHAT YOU COULD DO BEFORE.
EVEN IF YOU ARE NOT RETIRED,
WHAT IF YOU ARE ON A STRICT
FINANCIAL PLAN WITH YOUR
ADVISOR THAT SAYS IN THE NEXT
TWO TO FIVE YEARS, YOU ARE
PUTTING A LOT MORE MONEY IN
RETIREMENT AND CRAPPING
CRACKING DOWN ON DEBT.
JUST CREATE THOSE EXPECTATIONS.
IT SOUNDS LIKE THAT ROLLS
INTO YOUR NEXT POINT ABOUT
MAKING SURE YOUR CHILDREN LEARN
TO BE A BIT MORE FINANCIALLY
INDEPENDENT.
I THINK THIS IS A GOOD
PARENT-CHILD LESSON RIGHT NOW.
YOU GET A RESET.
I THINK TURN THIS INTO A
POSITIVE ORDEAL, YOU CAN SIT
DOWN WITH YOUR ADULT CHILD NOW
AND PULL A BUDGET WORKSHEET OFF
MY WEBSITE, WE ALWAYS HAVE THEM
ON THERE.
REDO A BUDGET.
THEY WERE ABLE TO LIVE ON THEIR
OWN FOR A WHILE, NOW THEY HAVE
TO COME BACK.
LET'S CREATE A BUDGET BASED OFF
OF YOUR CURRENT INCOME AND TEACH
THEM WAYS TO DO THAT.
MOST LIKELY, LIKE THE MAJORITY
OF AMERICANS, THEY HAVE NOT
DONE A BUDGET.
SIT DOWN AND HELP THEM CREATE
THAT BUDGET AS WELL, AT LEAST IN
TOPIC NUMBER THREE, CONSIDER
YOUR OWN NEEDS BECAUSE YOU
DON'T WANT TO JUST GIVE THEM
MONEY FOR NOTHING.
WE TEACH OUR CHILDREN, YOU
DON'T GET PAID FOR CHORES AND
YOU DON'T GET ALLOWANCES.
IF YOU WANT EXTRA MONEY, YOU
HAVE TO DO EXTRA THINGS.
MAYBE YOU HAVE THE ABILITY TO
HELP YOUR CHILDREN WITH SOME
MONEY BUT THEY HAVE TO EARN IT.
GIVE THEM EXPECTATIONS WITH
THAT AS WELL . JEOPARDIZE YOUR
RETIREMENT BY TAKING MONEY OUT
OF YOUR IRA, YOUR 401(K) TO
GIVE THE MONEY BECAUSE YOU ARE
NOT TEACHING THEM ANYTHING IF
THEY HAVE NOT EARNED IT.
FOR EXAMPLE, I HAD A CLIENT,
THE REAL ESTATE BUBBLE, THE
LAST BUBBLE WE HAD IN 2007 AND
2009, I HAD A CLIENT TO PULL A
LOT OF MONEY OUT OF THEIR IRAS
TO GIVE TO THEIR CHILDREN TO
POSTPONE FORECLOSURE AND GET
THEM OUT OF LOSING THEIR HOUSE
TO FORECLOSURE.
I DID NOT RECOMMEND DOING IT,
THEY DID IT ANYWAYS.
WHAT HAPPENED, A YEAR LATER,
THE KIDS LOST THEIR HOUSE
ANYWAY.
NOT ONLY IS THE HOUSE GONE, THE
MONEY IS GONE AND THEY HAVE TO
WORK ANOTHER FIVE MORE YEARS TO
MAKE UP WHAT THEY DID.
DON'T JEOPARDIZE YOUR
RETIREMENT BY HELPING OUT A
TEMPORARY SITUATION.
THEY ALSO THEN MISSED OUT ON
A SURGE IN THE STOCK MARKET A
COUPLE OF YEARS LATER WHERE
THAT MONEY COULD HAVE BEEN
BUILDING.
EXACTLY.
YOU ARE RIGHT ON.
THEY PROBABLY WOULD HAVE
DOUBLED THEIR MONEY IN THAT
FIVE YEARS.
WHICH MAKES SENSE THAT MAYBE
HAVING THESE CONVERSATIONS, NOT
JUST IN YOUR FAMILY, BUT MAYBE
SOMEONE WITH THE EXPERTISE ON
HOW TO MOVE FORWARD MIGHT BE A
GOOD IDEA.
WE GET REFERRED A LOT OF
CHILDREN BY MY CLIENTS.
TYPICAL AVERAGE AGES ARE IN
THEIR 60s, TYPICALLY.
A LOT OF CHILDREN ARE REFERRED
TO US TO HELP THEM OUT.
SOMETIMES, YOU NEED TO GET THAT
FINANCIAL PROFESSIONAL HELP.
SOME PEOPLE THAT LOOK WHAT A
REGULAR BASIS AT THIS,
UNDERSTANDING THE FINANCIAL
BUDGETING, AND SOMETIME WE HAVE
BOTH PARENT AND CHILD INTO THE
OFFICE SO WE CAN MEDIATE AND
HELP THEM UNDERSTAND WHAT THE
PARENT CAN DO AND WHAT THEY CAN
DO SO THEY CAN SEE THINGS EYE
TO EYE.
YOU HAVE TO SOMETIMES GET A
PROFESSIONAL INVOLVED.
IT IS OKAY.
PUTS US, THE ADVISORS AS THE
BLAME WHY YOU CAN'T FINANCIALLY
HELP THE CHILDREN.
WE WILL TAKE THE BLAME FOR
THAT.
TOUGH TIMES INDEED.
OF COURSE, PARENTS WANT TO HELP
THEIR CHILDREN OUT.
FINDING THAT COMMON GROUND I
THINK IS WHAT YOU WANT TO HELP
THEM ACHIEVE AS WELL.
100% AGREED.