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Japan's Leading Financial Newspaper

7 April 2004

U.S. Trends: Women Coming Home

Here in Chicago, seven close friends gather in a café which is always crowded with young people; most of the congregants at the table are women in their late twenties. Originally, they came to know each other by working in the same office. When the discussion turns to the more serious issue they face of moving home, the smiles and laughter quickly disappear. Erika Sanchez (27 years old) complained, "I was told by my father angrily, 'How do you feel about paying college tuition loans that are no useful in your life?’" Another young woman said she was hurt to hear her mother say, "My friend's daughter is taking her on a trip to the Caribbean. What a nice child."

This meeting provides an outlet to complain about their parents and life at home. Six of the members started work while living with their parents after graduating their college. The support group-style meeting is held three or four times a month. This meeting is dominated by the frustration that college grads living at home with their parents cannot be completely independent.

‘Normally, young people become independent of their parents just after graduation from school.’ This former truism is often no longer the case due to the convergence of socio-economic factors that plague today's young adults. According to Sanchez, who graduated from college in 2000, "I would guess that half of my 500 classmates returned home after graduation." The new phrase, ‘Boomerang Kids', was coined to describe this phenomenon. Sanchez lives with her parents, sister, and brother. She works for one organization, earning a yearly salary of $22,000 USD. She has not been able to find a job in which she can take advantage of her major in college. Worse, she owes $14,000 USD in  loans for her college tuition.

Says one group member: "It is impossible to live by oneself in large cities, with the exception of a small portion of young people." Contributing factors include an unstable labor market, skyrocketing rent, uncertainty about social security, and high divorce rates: the more women work in the U.S. society, the deeper these concerns become. It has become commonplace among women that if they do not return to their parents' homes, they will need to have second jobs and live with two or even three roommates.

Last year, TWENTYSOMETHING Inc.,  a young adult consulting company, researched the ratio of the recent graduates who returned to the parents’ homes after college. The resulting research indicated that approximately 64% of outgoing college grads moved home with an average stay of roughly 14 months. However, many parents are not adequately prepared to live with their now young adult children. ‘My children are saying that they want to come back to our house. Does this influence our life in our old age?’ This is the question that is frequently posed to financial advisors throughout the U.S.A. "Boomerang children can adversely impact the retirement game plan for aging adults while simultaneously increasing the dependence of the twentysomething children," reports an alarmed, 55 year-old financial advisor in Arkansas. This advisor personally experienced the "Boomerang" when, in October 2001, her daughter, Minny, 31 years old, moved back home. Minny was laid off from her employer which was adversely impacted by the events of 9/11 and the fact that living costs had increased 2.5 times. Minny's mother managed her life change by reducing the amount of money paid to her pension fund by $1,000 USD and making plans to help her daughter pay off a credit card debt of $25,000.

American parents have not begun to design savings plans which assume the strong possibility that their full grown children will move back home with them for an extended spell. These half-independent daughters are increasing in accordance with the trend of women seeking out careers in society and, as a byproduct, parental quality of lives are being compromised accordingly.

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