Wednesday, August 14, 2013

My Boomerang Take

One of the most common knocks against my generation has been the boomerang effect that we have had on our families of origin. One study I came across noted that nearly 40% of adults between the ages of 18 and 31 live at home with their parents. Is it normal? Is this the bludgeoning effect of students taking on crushing student loans? What are appropriate terms for parents to set their boomerang kids free into the real world? These are all excellent and poignant questions that fortunately you and I get to define for ourselves as we set these terms and conditions within our own families. So here’s my two cents.

The College Approach

I’ve broached this particular subject in past posts so I will be brief. The approach that my kids will take towards their college education will be vastly different from the one that I took. My wife and I plan to save and invest through an ESA, with plans in place to contribute the maximum allowable amount each year for each child. And when that child comes of age, in order to receive those saved funds for college, they must either (1) attend a community college and transfer to an in-state public university or (2) receive a “considerable” scholarship to the college of their choice. Loans are not an option and I for one would love to see our kids work while they are in college while going to school part/full time and graduate with a degree, no debt and work experience. From there is where it gets a bit tricky.

Post College

Ideally I would want my kid to hit the ground running by the time they graduate with their four year degree. In my perfect world they would work part-time and upon graduation be able to slide into a full-time job seamlessly, all the while having a 3-6 month emergency fund saved up and ready to tackle the real world. But the truth of the matter that I need to face is that the ideal doesn’t always happen. My kid could end up choosing, which would be perfectly fine, to go on an accelerated pace and earn their 4 year degree in a shortened time span and not work while in college.

To me what is important is getting the degree and not being in debt. And from my vantage point as a prospective parent, is that I would want my children to have the strongest footing possible leading up to and stepping out into the real world after college is over. That might mean living with mom and dad until they land a part/full-time job, rent an apartment and have a 3-6 month emergency fund socked away in savings.
Where the rubber meets the road lies in boundaries. I can imagine that I would want to see progress and updates from my kid that they applied to X number of jobs a day, are working with and calling local temp agencies and have a checklist on companies/job postings that they hunt for day in and day out, rather than sleeping in until 2pm every day and playing video games. Is it harsh and legalistic? Probably, but at the end of the day I want to mold and shape my children into individuals that will work as hard for as long as they possibly can to make their values, dreams and vocation all come together for a brilliant and fulfilling life. And as a parent I feel that I and my wife are primarily responsible for bringing influence and insight to the children that make up our family.

Major Life Events

I stand firm that my goal as a parent is to mold and shape a self-relying go-getter that can stand on their own two feet, but life still happens. My wife and I are currently at a point in our lives/family where the dollars are not a concern. Instead we are focusing and dreaming of life fulfillment through vocation and giving efforts. By the time we become empty nesters we will be in our paid for home and our investments will likely be earning more in a year than our incomes earn in a year. And if life smacks any one of our kids, we would be there with open arms to help.

Life events can include going on short/long term disability, divorce, loss of a child or spouse or chronic illness. If all things go well our kids will be debt free with emergency funds and have the right insurances in place, but I would contest that no insurance payout or emergency fund could replace a loved one or the struggle that comes with chronic illness. I for one would be honored and humbled if my grown adult child, after suffering an unspeakable family loss, health issues or emotional turmoil, turned to me for emotional support while they emerge from the rubble.

Yes boundaries would be in place to have a plan of action and get back on their feet, but to me financial peace in these scenarios is about being able to open my home to a loved one without the worry of needing extra money for rent or groceries creeping into the back of my head. In the heartbreaking scenarios I’ve just mentioned I would want to give my kid love and emotional support and I would want that to be my and their focus.

The fundamental problem that I’m seeing through case studies and examples with boomerangers is that neither the child nor the parent is prepared for the real world. Life happens and with it come emergencies and the need for savings. I’m strictly speaking generically, but essentially we have this problem: parents are up to their eyeballs in debt and borrow even more to put their kids through school. Those kids follow their parents’ example by not planning, and in most cases they studied in college what they wanted to learn rather than what they wanted to work in. And upon graduation the kid graduates without a plan and moves back in with their parents, also without a plan and round and round we go.

In closing I’ll add that the unexpected will happen in life both financially and emotionally and we have to be ready for it. And as a parent I want to carefully and precisely help my kids and not enable them to live without a plan, while at the same time be there for them in the most meaningful way possible when life happens.

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