Last hope in a weak economy? Mom and Dad

MILWAUKEE - After being laid off from her job as an events planner at an upscale resort, Jo Ann Bauer struggled financially. She worked at several lower-paying jobs, relocated to a new city and even declared bankruptcy.

Then in December, she finally accepted her parents' invitation to move into their home — at age 52. "I'm back living in the bedroom that I grew up in," she said.

Taking shelter with parents isn't uncommon for young people in their 20s, especially when the job market is poor. But now the slumping economy and the credit crunch are forcing some children to do so later in life — even in middle age.

Financial planners report receiving many calls from parents seeking advice about taking in their grown children following divorces and layoffs.

Kim Foss Erickson, a financial planner in Roseville, Calif., north of Sacramento, said she has never seen older children, even those in their 50s, depending so much on their parents as in the last six months.

"This is not like, 'OK, my son just graduated from college and needs to move back in' type of thing," she said. "These are 40- and 50-year-old children of my clients that they're helping out."

Parents "jeopardize their financial freedom by continuing to subsidize their children," said Karin Maloney Stifler, a financial planner in Hudson, Ohio, and a board member of the Financial Planning Association. "We have a hard time saying no as a culture to our children, and they keep asking for more."

Bauer's parents won't take rent money or let her help much with groceries. She's trying to save several hundred dollars a month for a house while working as a meetings coordinator.

Bauer would prefer to live on her own, but without her parents' help would "probably be renting again and trying to stick minimal money in the bank," she said...............................

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If the student parking lot at Clay High School is any indication, the "Bank of Mommy and Daddy" has been making loans for YEARS. And these are Bernanke-style of loans, since they never have to be paid back (like the bailouts of the investment banks).

The BoMaD is one of the terrible things that has been supporting this credit-supported consumer frenzy. People like Bauer in the story above are only sticking money in the bank so they can go back to being spendfreaks ASAP. Too bad for them the economy is heading into a Depression and their potential to earn money will be greatly diminished. (Of course, the good thing is that what dollars they do have will eventually be worth more than the debts they will be carrying -- depending, of course, on how long Barnanke and Paulson try to destroy the US dollar, and also depending on what terms all this debt will reside under. If your debt issuers start to unilaterally invoke "special handling fees" to compensate, then you'll never get out from under.)

Of course, living with older parents can be compensatory in other ways. If you put the family home into a trust, then once your parents die, you can just go on living there as if nothing happened, legally speaking. Of course, using a trust like this was undermined by the removal in 1998 of the tax on the sale of a home-of-residence (which helped to spark the Great American Housing Bubble, too).

My parents weren't too keen on the idea of my sibling moving home and disrupting their peace and quiet, so they bought a house for said sibling to "rent" instead. (Not that there is any actual exchange of rent money that I am aware of. lol Sigh.)

But, I guess it goes both ways - adult children also take their parents in and/or become caregivers. I suppose there could be perks for a parent in their 80s to have a child in their 50s move in with them too, like the lady in the story. As long as the adult child helps around the house and helps to care for the parent, etc, of course.

P.S. When I saw that this story only had one comment so far, I *knew* it was GZ before I even clicked on it. :) (Don't mean that in a negative way towards GZ - I just know he usually has input on topics like this.)

I just got PROFILED.

It really wasn't all that long ago that multi-generational families living together was the norm. I can see the pluses of having a living situation like that as long as you're not talking about the jobless geek living in the basement expecting Mom to do his laundry and clean up after him (or her as the case may be)

Both you and your parents are in deep trouble? What happens if you can't go home because your parents are about to hit skid row too? This is happening a lot these days.

You can still share. Remember, you can still rent, and a few more people added onto the lease can give the landlord more peace of mind while they share expenses.

I'm watching people literally destroy their finances trying to remain in separate households, when their conditions clearly indicated that they should have formed combined households years ago. This is just a disaster that happens in slow motion, and eventually something's got to break and break in a permanent fashion. (Note: One thing which helps mark that point is ILLNESS. Somebody gets really sick and in a few months a house is lost or a job is gone.)

Maybe combining the two households would be the key to keeping them both off skid row.
Think of the money that could be saved in child care alone with the adult child(ren) & spoouse (if there is one) working and one or both grandparents watching the kids.

There should be a nanny agency for sweet older ladies with some time on their hands who need a place to stay. I have extra bedrooms. :)

Its not even like I'd need a ton of childcare - just an hour or so in the morning before the kids get on the bus and for an hour or two in the afternoon when the kids got off the bus. I can handle everything else. She could have her days, evenings, and weekends to herself.

Man, that would kick ass. She wouldn't even have to cook or clean...hell, I'd kick in something extra besides free rent/utilities for that.

Someone should start a matching agency...that would be a good business opportunity. ;)

(Neither my mother nor my mother-in-law would be available for such an arrangement...they are still doing well financially and married to my father/father-in-law. Which is why I'd have to outsource to another sweet grandma lady. lol)

Those are good ideas. I can see it working as long as the people are able to handle living together. I can also see it being fairly awkward in some families.

The nanny thing is a great idea. Toledo and the area have a fair share of 2 parent and single parent families that are in need of more child care/ nanny features.

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