Boomeranging: How To Survive It

So, your grown-up child is planning to move back in? Read Serena Cowdy's financial rules for making it work.

I've done it - for a month. A friend did it for a whole year. And an old university chum is still doing it. What am I talking about? Boomeranging!

This practice - of grown-up children moving back in with their parents - is becoming ever more popular. Research from Abbey suggests that around one million 18-24 year olds either returned home to live with their parents in 2008, or stalled plans to move out, in order to save money.

And the credit crunch has swelled the ranks of the older `kidult' class too. Just under one million 25-44 year olds decided to move back home last year.

Many people are boomeranging so they can tackle their debts or save for their first house deposit. And with rising unemployment, this trend looks set to continue.

So, how can parents and children make boomeranging a success? Here are some tips that should mean you're still speaking to each other at the end of it all.

FOR PARENTS

1. Ground rules

First of all, decide what you consider reasonable behaviour and put it down in writing. As well as delineating your child's financial responsibilities, this should also cover any house `rules' (like cleaning duties).

Try to involve your offspring in the process by asking what he or she believes is a reasonable contribution towards rent, bills and other expenses.

And if you want to set a time limit on how long your not-so-little little darling can stay, now's the time to do it.

2. Split the bills

Does your treasure spend hours in the shower or leave all the lights on? Arrange for him or her to pay a percentage of the bills (rather than a flat monthly contribution).

Once they realise that their energy actions have financial consequences, they might alter their ways and lower your gas bill.

3. Tough love

It's hard to watch your children struggle. However, if you're constantly lending them money and picking up their clothes, they'll regress back to square one and lose all the coping skills they picked up when they left home the first time.

So - don't just bail them out, but do help them deal with their debts in a responsible manner. How To Be Debt-Free By 2010, by my colleague Jane Baker, is an excellent place for them to start.

If you really want to help financially, you could match the debt reduction payments they manage to make, with the proviso that they live within their means from then on.

And what if you don't need rent money - but you do want to encourage financial responsibility? Consider putting your child's monthly payments into a savings account - then giving the total as a surprise gift when he or she gets married or buys a house.

4. Don't jeopardise your own future

Whatever you do - don't put your own financial future at risk. You need to be squirreling away all the money you possibly can to get you through retirement.

Your children have many more years to plan for their old age than you do. And remember they could end up being financially responsible for you if you don't put enough by yourself.

FOR CHILDREN

1. Be reasonable

Have a look at point 1.) in the `parents' section. In a nutshell, discuss how things are going to work right at the beginning.

Be reasonable - work out what you can afford to contribute towards rent and bills, and offer to pay before your parents are forced to ask. And don't assume that because they're older, they don't need the money.

Once a regular amount is agreed, it's also a good idea to set up a standing order to transfer the cash from your account to theirs. This will avoid the unpleasantness of your parents having to chase you when you forget to cough up!

2. Ditch those debts

Try to turn difficulties into positives. For example, you probably won't be able to throw wild parties or entertain at home. Instead of blowing your cash on big nights out, be frugal and make use of this `quiet time' to blitz your debts.

Apart from anything else, it means you'll be in a financial position to move out sooner rather than later. Snowballing is one of the best ways to clear your debts quickly.

3. Save for the future

If you're debt-free and still living at home, the next step is to start saving. Your lower outgoings should give you an excellent opportunity to save for your first house deposit.

This is particularly important in the current climate, as mortgage criteria have really tightened up and you'll need a very substantial deposit to get a good mortgage rate.

How To Keep Your Savings In A High Interest Home, by my colleague Jane Baker, should set you on the right track.

4. Ring the changes

Finally - it's important to acknowledge (to yourself and your parents) that you're not the lazy, spotty adolescent who left home all those years ago.

A few household changes can really help in this respect. For example, try not to move into the room you grew up in - it will make it very tempting to return to your youth.

If there isn't a spare bedroom, give your old one a makeover by repainting it or rearranging the furniture. This should help draw a line under your childhood!

A word from the wise.

The Sunday Times columnist Cosmo Landesman was 52 when he moved back in with his elderly mum and dad last year, following the break-up of his marriage.

On the subject of returning to live with your parents, he advises: "Stay out of the kitchen. Stay out of harm's way, stay out as much as you can, stay sane - and do not give in to the urge to kill them."

More: Shock Proofing Your Retirement Plans | Is Getting A Lodger A Good Idea?