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Empty nest no more? What to do when your college kid moves back.

According to Zillow, more than 42 million adults living with their parents last spring were 18 to 25 years old, so if you find your nest is no longer empty, you aren’t alone.

Is it possible that empty-nest syndrome will soon be a thing of the past? A generation ago, when parents packed up the car and dropped their kids off at college, they were confident that a degree would secure their children a good future. Many converted children’s bedrooms into dens or offices or sold their homes altogether, knowing their children would be ready to live on their own after school.

But today that’s not the case. Given the rising cost of higher education, stagnant wages, and a soft economy, students are increasingly relying on loans to finance their education. That means many are graduating with unmanageable debt loads, and leaving the nest is simply not an option.

Nearly 80% of the population have student loan debt, according to data from the Institute for College Access and Success. A big factor in the migration back to the nest is this mounting debt.

According to a 2022 college graduate employment survey from consulting firm Accenture, nearly 60% of 2023 graduates planned to live at home after graduation, and 52% of 2022

In a perfect world, parents would start saving for college soon after the delivery of their bundle of joy, but with the demands of the present moment, new parents can’t always save for the future. A couple’s lifestyle and expenses incurred while raising a child often trump saving for college.

Of course, many parents want to help their children in any way that they can, at any age; but financially supporting grown children by dishing out loans or cash gifts can be risky. You don’t want to jeopardize your retirement.

Here are a few tips to consider if your child is moving back home.

1. Pay off debt.

The first order of business for you and your child is to start paying off the student loans. If you co-signed for your child’s loan, you are on the hook if your child defaults. It’s not uncommon for college graduates and their parents (as co-signers) to have over $200,000 in debt. If neither of you can make the monthly payment, then get in touch with the lender to discuss your options. Remember, if your son or daughter has federal loans, it’s the government’s job to work with you.

2. Don’t touch your retirement plan.

Do not cash out your 401(k) plan to pay down your student’s debt. Because you love your child more than you love yourself, you may be tempted to use retirement funds to help reduce his or her debt load. Don’t. You may end up having to move in with your kid and his or her family when you’re older.

3. Charge your child rent.

If you’re financially strapped, you can apply the money to the cost of feeding another hungry mouth in your house; otherwise, apply it to the student loans.

4. Insist that your child get a job.

Even if his or her ideal job is not attainable right now, your child should start working. I’ve had clients continue to support their kids long after graduation, paying their rent, car payments, cellphone bills, and more.

Meanwhile, the new graduate was not working, but instead searching for the perfect job. While each party knew it wasn’t the right thing to do, they became caught in a vicious cycle with tangled-up emotions of guilt, shame, and remorse. Trust me, this is not healthy for you or your child. Almost any kind of work is better than doing nothing; employers notice if an applicant has been idle for some time. And besides, how can your child pay you rent without a job?

5. Decide on a budget with your child and make sure it sticks.

That means your child may have to forgo some “luxuries” such as Netflix or the latest iPhone. Don’t lose the ability to afford your lifestyle to bankroll a lifestyle that your child couldn’t otherwise maintain.

6. Set a reasonable goal for when your child will move out.

This could be when the loans are paid off. It will give you and your child the financial freedom you each desire. He or she may be able to buy a home, or at least live independently, and you can secure your retirement.

Being careful, or even strict, about how much support you provide your children isn’t just about teaching them how to manage their finances and be self-sufficient. At the end of the day, you don’t want to burden your children by relying on them to take care of you financially.

So before turning on the “vacancy” sign at your empty nest, ask yourself: Can I afford this? Will supporting my child undermine my financial security? Ultimately, you have to take care of yourself before you can take care of others, and that includes kids returning to the nest.

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