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

Money Matters: The means to help our grown children

This little graph explains a lot. Despite the devastation of the recession and the lingering downturn, many of us with grown children are willing and able to lend or gift our kids money--to pay off debt, to get a start in life. Yes, our 401ks suffered in the 2008 debacle; some of our homes are underwater [literally--thank you, Hurricane Sandy] and figuratively). But evidently, our wealth has been coming back or it survived the hard times. According to a recent Pew Research Center survey, we of the baby boomer generation suffered less--lost less wealth than other groups and overall--in terms of financial loss--are in much much better shape than our 20- and 30-something children.

Why did the Great Recession hit households headed by grown kids in their late 30s and early 40s so hard? The federal Survey of Consumer Finances suggests it gets down to housing. For most Americans, equity in their homes represents the bulk of their wealth. The collapse of housing values in the middle of the past decade sent personal wealth into a nose dive for just about everyone, regardless of age. Overall, though, the Consumer Finances survey found that median home equity—the fair market value of a home less the amount of the outstanding mortgage and other liens—fell by about a third (32%) from 2007 to 2010. And U.S. Census data released in June found that most of the decline in median wealth between 2005 and 2010 can be attributed to sinking home values. We who've owned our homes longer and paid off more--if not all--of our mortgages, are coming out of the Great Recession in better shape.

All of which translates into a fuller bank account and the wherewithal to be generous to our grown children, should we choose to be.

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.

 

Parenting Adult Children: A special anxiety reserved especially for us

There's a special anxiety reserved for those of us with grown children. Since we're no longer in control of their health and safety--as we were when they were young and lived under our roof--when there are "threats" to their well being, we can only worry, fret, second guess, interfere and do assorted other things to help control our anxieties.

Even when we share our good guidance tips with them, it doesn't solve the problem. They're going to make their own decisions and they may or may not factor in anything we say.

Here's an example of what I'm talking about. Alpha daughter and her family--one child, one husband, one dog--were here for a weekend visit.

It was a lovely visit--lots of chit chat and talking about big and little things. But this weekend, it turns out, was the one where Superstorm Sandy was due to land late on Sunday or early Monday. I wasn't sure how involved our city would be, but between our home and Alpha Daughter's, chaos would reign. Before I went to bed Saturday night, I checked some online sites--the New York Times among them. And there it was--an announcement that Mayor Bloomberg was likely to close bridges and tunnels in and out of the city as well as the subway system. Airlines were announcing low or no cancellation fees for Sunday flights. Towns along the coast--New Jersey and Delaware beach towns--were being evacuated.

Alpha daughter and family were planning to drive home Sunday afternoon. Oy, as my grandmother might say. My son in law was still awake and working on his laptop. I laid out my concerns. He didn't seem worried. But I was all anxiety now. I sputtered on about how difficult it would to drive through or around the city. I suggested they get up early in the morning and drive straight home. 

He didn't exactly poo-poo my suggestion--he's too polite for that. But he did let me know that he didn't think there was any reason to change their plan yet. My parting shot was, "Just think about it."

Maybe it's because I'm getting older or less able to control actions, but little worries tend to be bigger ones now. I was awake most of the night. Fretting,, worrying, wondering how they could get home safely. And if they didn't leave on Sunday, they were not likely to be able to get out until Wednesday. I got up and did some deep breathing, some Yoga, some meditation. I couldn't force them to get up at the crack of dawn and get going. And that's what I felt they needed to do to get home safely and within a reasonable amount of time.

Alpha daughter's an early riser. When she got up and online, she started packing her bags. The situation was even worse than it had been the night before. As the extent of the proposed evacuations became clear, they decided to take the "long" route home--and not go near New York City but head west to Pennsylvania before heading east to their home in New England.

So one anxiety down--they were leaving early--but a day of nervousness ahead: were they finding their way on the new route, was there a lot of traffic, could they get gas and food at highway stops.

We can drive ourselves crazy thinking about the things that can go wrong. Fortunately, Alpha daughter was kind to her aging mom. She or my son-in-law called every few hours to let us know how well things were going. It took them 11 hours to make what otherwise should have been a 9-hour drive but they got home safely.

Now I could turn to anxieties over personal survival if we lost heat and light--or even part of our roof--from the storm. We were, luckily, on the edge of Superstorm Sandy's fury and just got a glancing blow. Ditto for Alpha Daughter in New England.  Now what else could I find to worry about? Oh yes. The election, which was still more than a week away.

Finally, today, the election is history and I can breathe deeply. For now.