Parenting Grown Children: What Dr. Spock Forgot to Tell Us

Emerging Adults: What, me worry? All about a college grad who lacks ambition, to say nothing of a job.

I had lunch with a friend  who was worried sick about her college-senior son. Her complaint: He is directionless and unable to take action to get a job. Not only hasn't he signed up with his college's job-search office or applied to opportunities his mother has suggested or unearthed. He hasn't even written a resume--no less let his parents review it for him.

           

His post-grad plans, such as they are, include living in an apartment with his current roommate--a chemical engineering major--who landed a high-paying job with a corporation. How will he pay the rent? his mother asked. "He told me his roommate might help him out for a few months," the mom says, clucking her tongue and getting angry all over again.

It's scary. College days--and the comparative irresponsibility of those years--are coming to an end. Reality needs to be faced. When she was his age, this mom says, "I knew no help would be coming from my parents. I was on my own. You can bet I had a job by the time I graduated."

These years when our children are "emerging adults" are tricky ones. A lot of "tough love" v. "helping hand" decisions are suddenly upon us. Job  hunting is no one's idea of a good time. My friends older son, who graduated from a top liberal arts college, is still struggling to find a "career" job. He's taking himself off to graduate school next year--he sees that as the only way to get ahead in his field. His younger brother can't help but know how tough it's going to be out there. A good athlete and student, he seems almost unnerved by having to try his wings in an arena where he doesn't know if he'll be "good" or not. 

Mother and son are barely speaking at this point. The dad's job has taken him out of the country for long stretches so she feels she is on her own in guiding this talented but un-ambitious son.

I try to reassure her that he will grow out of his lackadaisical style, that he will figure things out.  [I've written this post on the outgrowing phenomenon.] That's what a growing body of literature suggests will happen. For my friend in the eye of the storm, it's hard to keep any perspective about eventual growth and growing up. Not when so many of her son's friends have done so already.

 

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Re-Nesting: Our grown kids can make their fortune by moving back in with us.

We've all read or heard stories--or experienced the real thing--about college grads (or even older kids) moving back home. Thank you Great Recession and the Oh-So-Slow Recovery.

But that's only part of the re-nesting story. As I've written in a previous post, having our adult children live on their own after college is a socio-economic and cultural phenomenon. In many other countries (first world and otherwise), it's accepted as the norm that the kids will live at home until they marry. And for good reason: When they have a job, they can save money for their future connubial adventure or to invest in an entrepreneurial dream.

            All of this is the long way around reporting about a formula I came across recently: How much a stay with mom and dad is worth. The logarithm factors in the usual stuff--rent and food, as well as the other perks of living at home, such as having an Internet connection and cellphone paid by the parents and having laundry done by the host (usually, the hostess.)The findings? I'll let The Calculator tell it:

"I wish I’d lived in my parents’ basement the last four years. I’d be $85,000 richer. That would put me in down payment [on a condo] territory already.... Instead, I wasted all my money on rent, food, and TV."

Our hero kept a detailed spreadsheet of everything he spent in his four post-college-grad years living at home and used that journal to create, as he puts it, "a breakdown of the money I washed away."

       

Want to know what you're host-home is worth to your grown kid? You can go to the “living with your parents” calculator and plug in rent and other expenses (or use The Calculator's estimates of his spending habits) and see how much your grown child would save in four years of living in his or her old room at your house. Hint: The Calculator assumes you'll pay for car insurance and put him or her on your health insurance and that the money saved from living at home would be invested to earn a return.

Bottom line: Re-nesting is worth a sizable nest egg for them. For us, it's a less monetary formula: A chance to experience quality and quantity time with them. Fortune and fortunate tied up in one small bedroom. 

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Emerging Adults: Another view of that hard-to-find-a-job issue

Almost every parent of a recent college grad (or of a kid now in college) I talk to is worried: It's been so hard for recent college grads--recent being the past five years--to find career jobs. The parents I am talking to have kids who've attended good colleges and who graduated in the requisite four years with respectable or better grades. There have been lots of internships--some paid, though at a very low rate--but those only last a year and few of them have led to future employment. Some of the college grads have taken waitering, receptionist or babysitting jobs to earn money, but the struggle to find a foothold in the type of job for which they were educated has been elusive--not non-existent but few and far between. A recent New York Times article's headline said it all: It Takes a B.A. to Find a Job as a File Clerk.

So it's tough out there--for the young adults and their parents as well. (We also suffer who sit, watch and wait.) But the New York Times Economix blog has another take on the situation--with lots of graphs and charts to give worried parents some insights into the job potential for their college-educated kids and the ultimate value of that college degree.

Here are some of the high points.

According to a recent report published by the Bureau of Labor Statistics on the job prospects of new college graduates,  the graduates of the class of 2011 had an unemployment rate of 14 percent as of October 2011. But that number refers to joblessness just a few months after graduation. The unemployment rate drops sharply for all recent college graduates in their 20s. It is especially sharp when compared with the jobless rate for all high school graduates in the same age group.

Sources: October School Enrollment Supplement, Current Population Survey, Bureau of Labor Statistics; Thomas Luke Spreen.

The next chart looks at comparable numbers for the employment-population ratio, or the share of people within each population who have a job (as opposed to being unemployed or not looking for work at all).

Sources: October School Enrollment Supplement, Current Population Survey, Bureau of Labor Statistics; Thomas Luke Spreen.

So, while many of our college-educated kids are getting jobs well below their education-skill level, they are at least finding work, unlike their less-educated peers.

"As the economy continues to improve," Catherine Rampell, the NYTimes economic reporter who penned the piece, writes, "those recent college graduates will be better situated to find promotions to jobs that do use their higher skills and pay better wages."

From her mouth to the Corporate-God-Who-Hires ear.

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Emerging Adults: When is it time to cut the cord on financial support?

 These have been rough economic times and they aren't over yet. Young adults (recent college grads in particular) are having a much harder time than we did in latching onto a career job--harder even than their older brothers and sisters. There are  economic stats and charts ad nausea that support the discouraging outlook.

All of which brings up the question: Should we help support our struggling young adults and if so, for how long?

                                                  
  

The question is discussed in a recent column by Carl Pickhardt who writes about adolescence but often about the upper end of a still-turbulent age--the 18 to 23 year olds. Here are some his observations about extending their financial dependence on us:

--Some of us may "enjoy parenting and don’t want to quit or don’t know when to quit or believe a period of older adolescent struggle is no time to quit or that a good parent never quits or they have an older son or daughter who doesn’t want them to quit."

--"Just as parenthood doesn’t come with a set of directions for how to get started, there is no fixed schedule for financial letting go. Thus many parents continue their parenting by offering extended help, often of the financial kind, until a firm hold on young adult independence is finally gained."

--"What age should young people be expected to live dependently at home before leaving and beginning their actual independence? There is so much cultural variation. In the United States, we seem to have a common parental expectation that after high school graduation age, young people should be ready to move off more on their own. ...The point is: there is no universally fixed schedule for when the departure from home and the undertaking of full financial independence should begin."

--"In one sense, the young person who claims the inability to “afford” to live independently on the little money they can make may not exactly be speaking the truth which is that they can’t live as comfortably as when living with parents. In fact, electing comfort they may be missing out on learning some pretty powerful survival skills such as doing without, scraping by on less, prioritizing fundamental needs, buying cheap, sticking to a budget, making ends meet, living within one’s modest means, and maybe working more than one job to get from one week to the next to support a fragile independence. So if your son or daughter is up to the hardship, don’t automatically jump in and try to spare them the challenge."

--"You want parental help to foster self-help, not discourage it. This is why the helping contract must be conditional: 'Before we help you, we need to see efforts (actions, not words) of self-help from you first; and once we start helping you, we need to see evidence that you are gathering more power of independence as you grow.'”

--"[P]arenting is a lasting commitment -- to be there for your children whatever their age, not only in constant love, but in times of need. Life is an unpredictable journey, what Thomas Wolf called “the groping accident of life,” where happenstance for good and ill plays a huge role in the challenges that arise and must be met. It is a source of security to know that membership in family is life-long."

To end this post on a more mundane note, here's a chart reflecting a study by Pew Research Center on the change since 2005 of the percent of us who are helping to support our young adults.

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Our kids coming out of college have been struggling--it's hard to find a job, no less one that is a stepping stone to a career. A lot of us are supporting those kids, either by hosting them rent free at home (goodbye emtpy nest) or giving them a monthly stipend while they job hunt. When times are tough, tough love doesn't quite seem the right answer. But when does the helping hand stop? Even if we can afford it, is there a point at which we have to tell our kids to sink or swim?

That was a question Carolyn Hax dealt with in a recent column. A mom, whose 26 year old daughter had had an assortment of odd jobs, finally landed a job at an art gallery--a job in her career arc. The mom has continued to give her daughter a $2,500 a month stipend to help cover living expenses. But she would like to break the habit. "I feel she should shoulder more of her own expenses, given what she earns. There always seems to be some unexpected expense that crops up, though, preventing me from cutting back my support." The latest unexpected expense: the daughter wants to quit the job and open up her own art gallery with a co-worker, who would provide the financial banking--but not a living wage for the daughter. 

The mom wants to retire but her retirement income isn't big enough to continue to support her daughter at the $2,500 a month level. There is a nagging reason why this mom keeps shelling out money: If her daughter fails at her endeavor, she might be destitute and "then she might have to move back in with me, which would be an intolerable situation."

It's easy enough to say, as Hax does, "Cut this parasite off." When the daughter worked odd jobs, Hax says, the mom was an enabler laboring under the fig leaf of need. But now, "you have proof that you're not preempting poverty, you're insulating her from the cost of her choices."

The fear for many of us is just this: if we don't help out, our children will slip into living in a way that we can't tolerate--and it will happen to them (guilt-inducing music in the background, please) while we have a comfortable place to live and more than enough food to eat. I hear friends raise the question of whether we owe it to our children--and to ourselves--to keep them out of poverty while they find their footing. The issue they raise: Can we afford not to do it?

Tough questions. And hard to deliver the tough love answer to our kids. There are practical issues--what happens when we can no longer afford to help, or like this mother, are ready to retire but can't afford to do so until our children have made their way up the career ladder. By continuing to support them, are we standing in the way of their being able to take care of themselves.

Carl Pickhardt, a psychologist who specializes in adolescence has this observation for parents of young adults: "Just as parenthood doesn’t come with a set of directions for how to get started, there is no fixed schedule for financial letting go. Thus many parents continue their parenting by offering extended help, often of the financial kind, until a firm hold on young adult independence is finally gained."

The tough part is not the tough love but knowing where that line of independence is or ought to be.

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Money Matters: There's still a positive ROI in a kid's college education

Does it pay to pay for your kid's college? That's a question that's being raised in many circles as the recovery from the recession drags on and our college grad kids struggle to find a career job. Our sons and daughters who took out loans and now have to start repaying them--without a job to help them do it--are questioning whether they should have racked up that debt. And those of us who invested in our children's college education may be wondering how wise it was to put our money into tuition, room and board--upwards of $200,000 for some of us--when our kids are struggling to find work. What kind of return on investment is that?

The Bureau of Labor Statistics latest figures suggest that, all other issues aside, it is financially still a worthy investment. The unemployment rate for college graduates was just 3.7 percent in January and that was less than half the rate (8.1 percent) for those with only a high school diploma. Here are the stats in chart form:

Source: Bureau of Labor Statistics.

 

Catherine Rampell, writing in the New York Times blog Economix, notes, "the wage premium for those with a bachelor’s degree compared to those without one is also growing, particularly when you factor in the fact that college-educated people are more likely to be employed at any given time than less educated workers. One troubling trend hidden in all of these numbers is that the unemployment rate for those with some college but no degree — 7 percent — is not that much lower than that for people with no college at all."

Bottom line: It's not only worth the investment, it's worth that extra push to get them to stay the college course.

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College Costs: Are your kids getting your money's worth if you help pay the bill?

Many of us are called on to help out with the college bills for our emerging adults--and many of us agree to pay our children's way, no questions asked or raised. Or we may be asked or want to help--after the fact, as those college loans come due.

Our generation has operated under theory that a college education for our children is worth the financial sacrifice--hence the temptation and wide spread practice of helping with tuiltion as well as room and board if we can. Recent news stories have been surfacing that suggest some kids who have to borrow to go to college are questioning whether that higher education is worth encumbering themselves with debt only to find no job in their field when they get out of school. A sobering thought and one that has some reality behind it.

A recent study that relies on 2008 data reinforces our orginal beliefs. It finds that although college costs more in this country than others, the payoff is bigger. [See Sweden]. This graphic from Planet Money tells a good part of the story.

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Notes

*Data for Japan are from 2007.

Source: Organisation for Economic Co-operation and Development

Credit: Lam Thuy Vo / NPR

A few notes:

The data come from a recently published OECD report looking at educational data around the world. The cost of education includes tuition fees and living costs paid by the student, as well as earnings that students forgo by not working while they're in school.

"Benefits" is the difference in lifetime earnings between someone with a high-school degree and someone with a college degree.

For more on the difference in earnings between men and women in the U.S., see this study from Indiana University.

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Re-Nesting: Those emerging adults may be moving out and on--and soon!

He's 24. He's got a job. He's still living at home.

My friend Cathy is beyond frustrated. Her son is not helpful around the house. She's tired of asking him to take out the garbage, empty the dishwasher or run an errand--in the car she and her husband are providing.

Part of his inertia is his job history over the past four years. A graduate of a high-tier college where he got more-than-respectable grades, he's taken internships with  nonprofit organizations--even worked one that involved relocating to a destitute Central American country for a year--but doesn't feel he's on a career path. The current job is not in his field and is only a one-year contract. He's applied to graduate school and hopes to go next year. So right now he's feeling immobilized--despite his parent's suggestions that he have a plan B for living arrangements: They may sell the house this summer and move closer to the dad's job.

It may not ease her frustration to know that her son is part of a recent trend: the ever-so-slow growth in household formation. It's not only frustrating for those of us with adult children living at home, it's also a drag on the economy. Each time a household is formed, it adds about $145,000 to output that year as the spending ripples through the economy, according to an estimate last year from Mark Zandi, chief economist at Moody’s Analytics [as reported in the New York Times].

Over the last year, household formation has been picking up as this map from the New York Times indicates.

Source: Census Bureau, via Haver Analytics.

The pickup, the Times reports, "is probably related to job growth, which has enabled multi-generational households to spin off into multiple new homes." 

The overall trend is good news for Cathy. Her son may be forced to move if she sells her house and will certainly move if he gets into graduate school [he's applied to schools one and two time zones away] and may even be heartened to move out by his improved chances in an improving job market.

“They can only live with their parents for so long," Zandi noted. "There are powerful centrifugal forces in those households, on both side. As soon as they have a chance to get out, many will take it.”

All of which could help Cathy feel better about putting her house on the market--That is, if her second son, graduating from college this spring, finds a more favorable job market than his brother did. It's still too soon to "amen" to the pressures of the re-nesting stage.

 

Lending Money: The family fund that offers a helping hand and a living legacy

Many of us want to make things easier for our grown children--pave the road for them with a little help here and maybe even a lot of assistance there. That is, if we have the wherewithal to do it.

Recently, the New York Times weighed in on the issue, taking as its news cue presidential candidate Mitt Romney's remark, "I have inherited nothing." The initial point Times writer Ron Lieber makes is that a living inheritance comes in many forms. "It exists along a range from the free room and board for a 23-year-old intern to a stay of years for a 43-year-old single parent who has lost a job or recently divorced. The contribution can be as small as a first month’s rent or as large as the 25 years of payments that many parents now make on college loans they took out so their children would not have to."

The larger point is that the harder a young adult has to work to make the next geographic, career and economic step up, the more difficult it is to make that step. And repayment of student loans--a crisis that is raging among college graduates, both recent and long-time--is one of those hurdles that can keep a grown child from making that next step up. "The lack of any family help can have a compounding effect on the millions of people who have negative net worths well into adulthood thanks to their student loan debt," Lieber writes.

Meanwhile, even as college costs rise, today's economy is marked by a distinct lack of opportunity for college grads to move into career jobs that pay enough to cover living expenses. And that's why so many of us are helping our grown children. Recent data shows that  nearly 60 percent of 23- to 25-year-olds report receiving some kind of financial assistance from their parents--even when it's sometimes a stretch for the parents. As one 70-year-old parent told Lieber, he didn't want any of his three children "to go so far downhill that they’ll never get out.” In other words, those of us who can afford it are, in effect, trying to guard our children against downward mobility.

Lieber ends his piece with a suggestion for providing family funds for college students: a loan pool set up by the family. He noted that George Lewis, an 82-year-old lawyer in Quincy, Ill., along with his nine siblings set up an education fund in honor of his grandmother who "had a strong belief in education." Today, the nearly 50-year-old fund, with holdings of $111,000, lends money interest-free to scores of members of the extended clan. 

SInce that piece ran, Lieber has updated it with other examples of family funds. Some of the examples are of fairly prominent people--Berry Gordy (the founder of Motown Records), for instance--who set up family funds to lend money to the upcoming generation. But one made it all seem within reach to the non-prominent among us. Lieber reports that Suzette Haden Elgin, in a book called “The Grandmother Principles,” offered her own notion of a family loan fund that grandmothers can initiate. She suggests asking for a small deposit from everyone in the family, including children. Having the younger ones pitch in can help give them a stake in the process and a reason to track the fund’s growth and its beneficiaries.

Put that way, it doesn't seem so formidable and even has the frisson of bringing the family along on a daring step toward the future.

 

Parenting Adult Children: Letting them treat you to something

A few years ago, the magazine I worked for was bought and sold. In the morning we were told who the buyers were; in the afternoon, we were all fired--except for five 20-somethings. The shock of it made our already close staff closer, even in the diaspora. Everyone's resettled now but we have many a mini-reunion. At a recent one--bagel and coffee on a Saturday morning--a former co-worker (and mother of a 28-year-old married daughter) told me she learned something from my blog. (Now that was a good feeling.) More specifically, she was referring to the Notes to Self item, Let them treat you to something.

Last year, before she resettled in her new job--or even knew that there was a job out there for her--she  went up to Brooklyn to visit her daughter and son-in-law, staying with them in their small apartment as she usually did. When they went out for dinner in the evening, her daughter grabbed the check. It was the first time. The mother's first reaction was to say "No, I'll take care of it." But the second--and the one that dominated--was to 'Let them treat me to something.'

"It made them feel good," she told me. It made her feel good, too. "I was out of a job so it was especially nice. It was a recognition of their independence. And it also made me realize they could afford it--and that was a very nice feeling, too."

Since then, she and her husband have gone to Brooklyn several times to visit their daughter and they've let their daughter pick up the tab from time to time--for movies, ice cream cones or brunch. It puts everyone on a more adult standing--not to have mom and dad the ever-indulgent parents; letting the grown kids feel grown up. What a tonic. And a treat.