For graduates who return home

Your Money

May 27, 2007|By Carolyn Bigda | Carolyn Bigda,Tribune Media Services

Graduating from college marks a significant step into adulthood. So it may seem paradoxical that for many grads, moving back home immediately follows.

About half of college graduates plan to return home at the end of school this year, according to a 2007 survey from MonsterTrak, a job search engine for students.

The stampede home is not a new trend; an equal proportion of students said they planned to move home last year. And plenty of studies show that grads face steep hurdles to becoming financially independent, from student loan balances that average about $20,000 to rising rents for apartments.

What's less apparent: Post-graduation may not be the only period in your adulthood when you head back to the nest.

Financial setbacks, such as a divorce, also can lead you home.

Or you may need the assistance of free rent and food to reach certain goals, say, switching careers or buying a house.

"We have high ambitions," said Po Bronson, author of What Should I Do With My Life? "But the higher you shoot, the harder it can be or the longer it can take" to achieve those goals.

All the more reason to make the most of your time at home. Here are some tips on how to do just that - and not wear out your welcome:

Identify your goals.

"Boomerang" kids typically move home after college to get their bearings and make the transition to independence without the pressures of rent due every month. Other times, moving home is for a more specific purpose: They're saving for a down payment on a place of their own.

In either case, it's important to name the reason for returning home and to outline a plan for getting out.

"Regardless of why you come home, it can't be without a deadline," said Mary Claire Allvine, a financial planner who splits her time between Chicago and Atlanta. "If you don't set that upfront, it's really tempting to stay in a place where the food is free."

Sit down with your parents and discuss your goals. Then give updates on your progress.

"Not that mom's going to nag, but talking about it shows maturity, independence and responsibility," said Cicily Maton, a financial planner and partner at Aequus Wealth Management Resources LLC in Chicago.

And, if your plans aren't working out, parents could help you rethink your strategy.

Set house rules.

In addition to being open about your goals, you also should talk frankly about what the day-to-day routine will be like at home, including who will do the laundry and how you'll contribute financially.

"When we go back home, there's a tendency to fall into old roles, and if you don't explore that, it can lead to misunderstandings," Maton said.

Some parents, for example, won't accept a rent check, but they may appreciate it if you buy groceries or pitch in some other way. And, if you're not used to paying bills regularly, having some monthly obligation will help you get ready for when you do move out.

Recognize parents' needs.

Finally, keep in mind that not only you have changed since you first moved out, but your parents have, too.

They may have adopted a new lifestyle and like to go to bed at a specific time or keep the thermostat at a certain temperature.

And your parents likely have new financial obligations, perhaps putting a younger child through school, saving for retirement or making savings last in retirement.

"There's a tendency of kids to think their parents are really well-off because they live in a spacious house filled with nice things," said Mark Pfaff, senior vice president at New York Life Insurance Co.'s agency department. "They've got to understand that their parents may not be as wealthy or have as much discretionary income."

You don't want to become an unnecessary strain for your mom and dad, and showing you understand their circumstances can go a long way.

Carolyn Bigda writes for Tribune Media Services.

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