Boomerang finances: when kids return home.

• Position: Your Life - Brief Article

After all these years, your children have finally decided they like your cooking. They like it so much, in fact, they have moved back home to eat. The number of adult children living with their parents has risen since the 1970s, according to the U.S. Census Bureau. They come home for a variety of reasons: divorce, job loss, newly graduated and seeking permanent employment, poor money skills, or perhaps they are struggling to make ends meet with a low-paying job, high rent, and debts such as student loans. Then there are those who are simply too lazy and are more than willing to live off their parents.

Whatever the circumstances that bring a child home, it is a financial burden on parents who may have thought they were finally financially free and ready to focus on their own goals. Here are some guidelines from the Financial Planning Association, Denver, Colo., to help minimize the financial impact and avoid the potential conflict it often brings:

Don't derail your own financial plans, unless it's absolutely necessary, at this stage in your life. Parents of boomerang kids have stopped saving for their own retirement or given up planned vacations because of the financial burden. This often breeds resentment and, in most cases, is unfair to the parents.

Set financial ground rules. Before they cross the threshold, returning children should understand exactly what you expect from them financially. How much should they contribute toward groceries, utilities, perhaps even rent? Write out a contract with firm numbers if you think it is necessary. You may want to establish a time limit for how long they can remain at home. Those with no financial obligations and an open-ended stay have been known to hang around for years, either not bothering to get a job or blowing their earnings on just the fun things in life.

Review your insurance. One of the first things you should do is be sure your children are covered by health insurance. You don't want to bear the financial cost of a serious illness or...