When Your Kids Move Back Home

Schools are back in session.

And that means many recent college graduates have moved back in with their parents.

This boomerang effect is widespread. According to the U.S. Census, about 56 percent of men ages 18 to 24 and 43 percent of women in the same group are living with one or more parents. "If the economy doesn't improve soon, this phenomenon is likely to increase," William L. Anthes, president of the National Endowment for Financial Education, noted in a recent news release quoting the census numbers. The endowment is based in Englewood, Colo.

Setting ground rules for how to behave when living at home is important, but so is setting up financial guidelines, Anthes said.

Among his suggestions: Charge rent and an appropriate portion of utility costs. If a parent does not need the money, it can be put aside in a savings account for the benefit of the child. But requiring a monthly payment just as a landlord would will help a child make an eventual transition to a place of his own. Have a child pay for any extra telephone services needed because of his presence. If a child shares existing cable television or Internet service, have him pay a proportional share. If he has cable or Internet service installed, then he should pay for it. If other household members begin to use those services, then the cost can be split. If a child uses the family car, then he should pay the proportional cost, possibly based on mileage. Have the child pay for his share of the groceries.

"The best approach in virtually all cases is to set standards and establish a plan that moves (children) back to independence as soon as possible," Anthes said.

© 2003, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News.