Financial Stress in the Family

• Boomers’ aging parents may require financial support.
• Boomerang kids may need money and a place to live.
• 7 tips for when to say yes and when to say no to family.

— Mark Fredrickson

"Home is the place where, when you have to go there, they have to take you in," wrote the poet Robert Frost. But is it true? And how do you decide?

Well-functioning families respond to this challenge with love, advice and emotional support. But it gets tricky when what's needed is money. How much you help financially depends not only on your income and savings but on your family relationships and personal feelings about what your obligations are.

The multigenerational family is staging a comeback. In 2008, 16 percent of the population (49 million people) lived in households of two adult generations or with grandchildren, the Pew Research Center reports. In 1980, just 12 percent did (28 million people).

The recession is accelerating this trend. Older adults who lose jobs or run short of savings might have no choice but to move in with their kids. This includes widows whose husbands didn't leave behind enough money for them to live on, as well as frail older people who can't afford independent care in their own homes.

Boomers tend to think of assistance as running one way — from them to their parents or adult children. But family assistance runs in the other direction, too, according to studies conducted by Berit Ingersoll-Dayton, professor of social work at the University of Michigan, and her colleagues. Grandparents might babysit, do housework, cook or take the family out to dinner — activities that help their children reduce spending. They might contribute to a grandchild's college fund, make cash gifts on holidays or pay rent if they move in.

At the same time, the recession is also chasing young adults back to Mom and Dad — especially men ages 25 to 34. In a Pew Research poll, 13 percent of parents with grown children said the recession had forced a child to return home in 2009 after living independently.

The 2010 Families & Money Survey by the brokerage firm Charles Schwab found that 41 percent of parents provide some level of financial support for their children ages 23 to 28.

Here's where family values enter the picture. When it comes to helping adult children, parents and children may not think alike.

A study called "Helping Out the Kids," led by Frances Goldscheider, now of the Maryland Population Research Center, looked at what children and their mothers believe their financial obligations were under various scenarios. You won't be surprised to learn that, in general, young adults expected help more often than their mothers expected to give it.

The two generations agreed on support for education and that children should pay rent if they live at home. They differed, however, on how much support is due kids who marry or aren't in school.

According to the study, one-fourth to one-half of the offspring thought they should get some financial help when they start out in life, regardless of their circumstances. If they marry, a bit less than half of sons expected money toward their basic expenses; about a third of the daughters did, too. Not surprisingly, fewer than one-sixth of the moms agreed.