'Boomerang Kids': How parents can financially support adult children who are living back at home

PHILADELPHIA (WPVI) -- As economic pressures rise and the job market gets tougher, more and more adult children are moving back home.

They're known as "Boomerang Kids," and many parents are wondering how to support them without putting their own retirements at risk, and how to help their children in the short term while also helping them build financial independence in the long term.

Action News spoke with a financial advisor and a family currently in this situation for advice.

Bella Galiano is a 21-year-old nursing student who moved back home to live with her parents in Voorhees, New Jersey.

"Until I get a good enough job, I do plan on living here," she says. "I don't really rely on them as much as I did before, but things like my phone bill, my car - they pay for that."

Bella's mom Dana Galiano says she's happy to have her at home and feels lucky she has the resources to continue to support her daughter, but she's also put some things in place to make sure Bella can be on her own eventually.

Bella works two jobs and has to give her mom part of her paychecks to learn how to budget and save.

"That's what I hope to instill in her within the next two years, for her to see this is the reality of what you have to pay for," Dana says.

Forced budgeting and savings are important, so many financial advisors suggest families require their kids pay at least a little something for food, utilities, and rent.

Parents can then use that money for household expenses or use it to build their kids a nest egg.

"If you're able to, save it for them. Have them get used to paying the rent but then three years later, here's the $20,000 you've given me over the last two years for a down payment," suggests Dan Hernandez of Milestone Wealth Management.

Hernandez also says, especially if you give your kids a lump sum to help them out, make sure it's not a gift.

He advises you have your child sign a loan document, some kind of promissory note, to protect those funds.

"If the child does get into some financial issues, maybe credit or problems, this money you've given them isn't theirs. It's something they have to pay back, so it's not necessarily subject to the creditors," he says.

You can forgive the loan later, if you want or can, but it's good protection because that money isn't legally theirs and it furthers the idea that there are no more handouts.