A-Z of Personal Finance: B is for Boomerang Generation

The “Boomerang Generation” – the return of the children.
Middle age is usually considered to be a life stage where you experience the “empty nest” as children leave home. For many people in their 50s, this has not been the reality; a growing number of “returnees” dubbed the “boomerang generation” are postponing the traditional expectations of leaving home and returning to their childhood bedrooms.

Why do they return?
The “boomerang generation” is largely back home as a matter of necessity. In the current economic climate, most have little choice but to turn to relations or friends for somewhere to live on the cheap. The job market is bleak, with unemployment on the increase, low salaries for entry-level jobs and the increasing cost of accommodation, make it difficult for young people to be able to rent, let alone own their own property soon after they graduate.

The implications
This change in the pattern of life’s stages can lead to delayed independence. Indeed, parents may actually be holding their children back from success and a fulfilling life by overindulging them. Naturally many young people would rather keep their options open and are not willing to compromise and accept just any first job. Unfortunately, they tend to ignore the need for saving and investing but are often more pre-occupied about the now and instant gratification.

Obviously there are also significant financial implications for parents who themselves have retired or are approaching retirement. The limited funds they have accumulated to be able to enjoy a secure and comfortable retirement after several years of sacrifice for their children are now being spent on grown up children.

Plan Ahead
There is the very real possibility that one or more of your children may return home for a while, so as you make projections as to the level of income you may require to sustain your retirement, keep this in mind; this will inevitably raise your monthly costs or could even delay your retirement plans. In your 40s or 50s, it is likely that you simultaneously have to bear the costs of caring for aging parents, continue to support your children and fund your own retirement.

The full text appears in “A-Z of Personal Finance” by Nimi Akinkugbe. Available in leading bookstores including Glendora Books, Laterna Books, Patabah, Terra Kulture, Quintessence, Jazzhole …and online from Jumia, Amazon, Barnes & Noble, Manna Books and AMV Publishing