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Some Make Do in the Recession by Moving In With Dad and Mom

By Nancy Trejos
Washington Post Staff Writer
Sunday, April 26, 2009

For five years, Felicia Brown had the luxury of living by herself in a three-bedroom townhouse in Upper Marlboro.

On March 20, she was laid off from her job as a grants manager for the AARP's foundation. Suddenly, her $2,000 monthly mortgage seemed foreboding. Unable to find a job right away, the 41-year-old did the only thing she could think of: She asked her parents if she could move back into their Lanham home. This week, renters will move into her townhouse. She has moved her belongings into the bedroom she slept in until graduating from college two decades ago. On her bed is her Cabbage Patch Kid from childhood.

"My mother has cleared out the closet and some of the drawers in the room," she said, "and I'm just going from a home to a room, and I'm going to be happy until this all blows over."

The recession, loss of jobs and homes, high cost of living and growing debt are forcing adults to turn back to their parents for financial help. These boomerang kids, as sociologists and psychologists call them, are the latest change in the ever-shifting landscape of the American family. Intergenerational households -- parents, their children and sometimes grandparents -- were common in the 19th century. That changed early in the 20th century, when sons and daughters married younger -- sometimes in their teens -- and quickly moved out to create their own households. Then the Great Depression forced families back together. They once again grew apart during various lush economic periods that followed.

"In some ways, we're coming back and living together the way we did during the Depression," said Amy Goyer, family relationship expert and senior vice president of outreach at Grandparents.com, an online community for grandparents.

According to 2008 Census figures, 20 million people ages 18 to 34 live at home with their parents -- 30 percent of that age group. Researchers for the Network on Transitions to Adulthood, a group financed by the John D. and Catherine T. MacArthur Foundation, found that since the 1970s, the number of twentysomethings living with their parents has increased by 50 percent. Of those who moved out of the house by age 22, 16 percent returned home before they hit 35, the researchers found.

Recession will probably accelerate the growth of the phenomenon, as many college graduates find themselves in a market where jobs are not available or don't pay as well as they expected when they took out expensive student loans. Almost half of June 2008's college graduates had planned to move home after graduation, according to a survey by the employment Web site Monster.com.

David A. Morrison, president and founder of Twentysomething, a consulting firm that researches young adults, said the last time he noticed this phenomenon was during the recession that hit the country around 2001. But the severity of this economic downturn has forced children of all age groups, single or married, back home, he said. The dynamic is different. Back then, parents with lots of equity in their homes didn't feel as pinched by helping their children. Now, everyone is feeling it.

"It's a much more everyone pulling their weight, because the parents are hurting as well," he said. "The parents are willing to have the kids there, but it's not a free ride."

Callie Briese, 27, and her husband, Ryan, 29, are each contributing $100 a month to household expenses while they live with her parents in Northern Bristow. Her parents have not obligated them to do so, but they feel that they should.

The couple relocated to Washington from Minneapolis because Callie landed a promotion in her financial services company's office here. Callie arrived in February. Ryan stayed behind to continue his job as a legal aid attorney. He, too, moved in with his parents. He applied for jobs from afar and found nothing. He has been looking since December, when Callie found out about her promotion. Then they discovered she was pregnant. Three weeks ago, Ryan finally moved here -- with no job.

Their plans to buy a house to take advantage of President Obama's first-time homebuyer's tax incentive are on hold for now. "It's hard to make that leap with one income," Callie said.

Callie and her mother, Sandy Berg, admit it's been an adjustment. For one thing, Callie is much less tidy than her mother. Callie also has to share a house again with her 20-year-old sister.

"I remember bringing home each new baby. As with any family dynamic, everything changes and we had to shuffle and make things work," Berg said.

Berg and her husband have not set a deadline for the couple's departure. Callie said they are hoping to be out by summer.

"Whether they decide to buy or rent, we want to help them save," Berg said.

But financial planners and psychologists said parents should not sacrifice too much for their adult children. Many have seen parents dip into retirement savings to bail out a child. Such an action could end up forcing parents to turn to their children for financial help later in life.

"They may be helping them out in the short-run, but these days parents really have to think long and hard about who's going to be on the hook to help them out if they run out of money," said Tim Mauer, a certified financial planner with Financial Consulate in Hunt Valley, Md. "You're kind of stealing from the future to help pay for the present."

Parents should be clear about what they expect. If they lend money, they should specify whether it is a loan or a gift. A loan should come with a contract that spells out terms of repayment. If children move in, there should be a timetable for moving out. They also should decide whether they're going to charge rent or ask that they contribute to household expenses.

Not all parents follow those rules. James Brown, Felicia's father, couldn't care less whether his daughter stays two weeks or two years, and he wants no money from her. "We have followed her from being a little thing all the way through to her present life," the retired insurance agent in his 70s said. "We have always been the parents ready to help with whatever the circumstances are."

Staff writer Ylan Q. Mui contributed to this report.

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