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Last Hope in a Weak Economy? Mom and Dad (extended family by necessity)
AP ^ | 03/23/08 | EMILY FREDRIX

Posted on 03/22/2008 8:15:13 AM PDT by TigerLikesRooster

Last Hope in a Weak Economy? Mom and Dad

By EMILY FREDRIX,AP Business Writer

AP - Sunday, March 23

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.

Shirley Smith, 80, said she and her husband didn't hesitate when they invited Bauer to return to their home in Eden, Wis. Buying groceries for another person isn't stretching her budget too much, she said.

"I've got three kids and any of them can come home if they want," she said.

But plenty of well-meaning parents must delay retirement or scale back their dreams because they have to help their children, Stifler said.

Some of Erickson's clients are giving as much as $50,000 at a time to their kids, many of whom have overextended themselves with big houses or lavish lifestyles. And the sliding economy might threaten their jobs.

Parents feel guilty if they don't offer help, but she warns them to be careful with their savings.

"I almost have to act like a financial therapist if you will," she said. "'Here is the line I'm drawing for you. That's fine. You can do up to this point, but at this point, now you're starting to erode your own wealth.'"

Anna Maggiore, 27, lost her job as a publicist in Los Angeles about three years ago and moved into her parents' house in Los Alamos, N.M.

She tried to find jobs, but nothing stuck, so she enrolled full-time at the College of Santa Fe to finish her bachelor's degree in business.

She figures her parents spend about $1,000 a month on her, including a car payment, car and health insurance, school and other costs. Her father is a retired nuclear physicist and her mother, a guidance counselor, will retire this spring. Now Maggiore is looking for work so she can supplement their income.

"It's kind of hitting me finally that I need to get out there and find a job," she said. "Even if it's just part-time just to help out however I can."

A new survey by the retiree-advocacy group AARP found that one-fourth of Generation Xers, those 28 to 39 years old, receive financial help from family and friends.

The online survey of nearly 1,800 people ages 19 to 39 also found 57 percent believed they were "financially independent." But in a separate question, 33 percent said they received financial support from family and friends.

Bauer was caught by surprise when her job at a resort in Kohler, Wis., was cut four years ago, one year after she got divorced. The single mother bounced around to several lesser-paying jobs, declared bankruptcy and even moved 60 miles south to Milwaukee.

Her daughter, now 12, moved in with Bauer's ex-husband near her hometown.

Bauer decided to move to be closer to her and in December she found a job with the Experimental Aircraft Association in nearby Oshkosh. She tried to buy a house but needed 5 percent down. She only had 2 percent. She's now saving for a down payment and hopes to have it as early as June.

Bauer said she gets along well with her parents and knows she'll never get to spend so much time with them again. But it hurts her ego to live at home.

"I've had people say to me, 'Oh God, I could never do that,'" she said. "But you take humble steps in order to move forward."


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: babyboomers; genx; housing; parents; recession
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1 posted on 03/22/2008 8:15:14 AM PDT by TigerLikesRooster
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To: TigerLikesRooster; Uncle Ike; RSmithOpt; jiggyboy; 2banana; Travis McGee; OwenKellogg; 31R1O; ...

Ping!


2 posted on 03/22/2008 8:15:42 AM PDT by TigerLikesRooster (kim jong-il, chia head, ppogri, In Grim Reaper we trust)
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To: TigerLikesRooster

Woe unto me if I, at 52, have not enough common sense than to ‘have to’ move back in with my parents because of financial reasons.


3 posted on 03/22/2008 8:21:41 AM PDT by AD from SpringBay (We deserve the government we allow.)
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To: TigerLikesRooster
It appears that some members of the Baby Boom have led irresponsible lives and expect that other people (including, still, Mummy and Daddy) to pick up the pieces for them.

Is this indicative of a weak economy? Or of individuals who have never grasped the importance of personal responsibility?

4 posted on 03/22/2008 8:22:31 AM PDT by ClearCase_guy
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To: ClearCase_guy

Well, gee, I’m in my fifties, never made a huge salary, and still own a place to live and have enough money that I could survive without a job.


5 posted on 03/22/2008 8:24:41 AM PDT by proxy_user
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To: AD from SpringBay

My parents are 87 and 85, and they have more money in the bank than any of their 5 children, and a home that is paid for. I have one sibling living with them already. That’s the difference between growing up in the Depression years and growing up in the 50s and 60s. It’s our own fault for spending it all as we made it, and not saving. A lot of us Baby Boomers are working like hell now to catch up, and that is one reason why consumer spending is down.


6 posted on 03/22/2008 8:25:34 AM PDT by Dems_R_Losers (Waiting for 2012 to vote for an actual Republican)
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To: proxy_user
Well, gee, I’m in my fifties, never made a huge salary, and still own a place to live and have enough money that I could survive without a job.

Well, if you ever need a good meetings coordinator, I know where you can get one cheap.

7 posted on 03/22/2008 8:25:53 AM PDT by Jeff Chandler (Iím gonna get me a shotgun and kill all the whiteys I see...)
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To: TigerLikesRooster
I love what that idiot days, “ parents sacrifice their financial freedom for their kids”. That is what being family is all about. I would never turn away family in a bad situation. Life is not about how much you have, but how much you give. I truly feel sorry for those that think otherwise.
8 posted on 03/22/2008 8:28:29 AM PDT by nyconse
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To: TigerLikesRooster

Maybe she could move in a house with about fifteen other people. They could use the bedrooms in shifts. Getting paid under the table at less than minimum wage would help also. Medicine of course would be free courtesy of the local emergency room. Always somebody ready to employ those willing to work for less. Real hard to compete with someone willing to live this way for a job that doesn’t even pay a living wage.


9 posted on 03/22/2008 8:29:14 AM PDT by Sterco
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To: ClearCase_guy

There is no question that a lot of us could have saved more; but a lot of us also had to pay off student loans when we started out, and a lot of us have had much less stable careers than our parents had. I have had 10 jobs in 25 years, with three long stretches of unemployment that ate up my savings and even sent me into debt.


10 posted on 03/22/2008 8:29:59 AM PDT by Dems_R_Losers (Waiting for 2012 to vote for an actual Republican)
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To: nyconse
I would never turn away family in a bad situation. Life is not about how much you have, but how much you give. I truly feel sorry for those that think otherwise.

I understand that sentiment. But doesn't there come a point when a person actually does more harm than good by continually supporting a child who has made the same mistakes over and over? When mom & dad are gone, who will the woman in the article turn to? And I know each case is going to be different, but based on what we know from the article - is this woman ever going to learn how to save and live within her means if she can always count on someone giving her more money?
11 posted on 03/22/2008 8:32:51 AM PDT by AD from SpringBay (We deserve the government we allow.)
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To: TigerLikesRooster
I'm not seeing this as much different than the traditional family model for thousands of years...It's only in modern American society where we've experienced the wealth to expand beyond those family ties.
12 posted on 03/22/2008 8:33:08 AM PDT by Caipirabob (Communists... Socialists... Democrats...Traitors... Who can tell the difference?)
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To: Sterco

Well, I have never seen illiterates who can’t speak English working as a publicist or meeting coordinator. You have to at least present an educated appearance for such jobs, however little you know.

And most of them pay in the $25-50K range.


13 posted on 03/22/2008 8:34:12 AM PDT by proxy_user
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To: Dems_R_Losers

another reason is we keep subsidizing welfare recipients. Our taxes are way too high. The government makes us pay for the indigent dead wood in our society.

They take money from my childrens mouth to feed less fortunate.

Didn’t know the government was a non profit like the Salvation army or...


14 posted on 03/22/2008 8:34:43 AM PDT by television is just wrong
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To: TigerLikesRooster
She figures her parents spend about $1,000 a month on her, including a car payment, car and health insurance, school and other costs. Her father is a retired nuclear physicist and her mother, a guidance counselor, will retire this spring. Now Maggiore is looking for work so she can supplement their income.

Oops.

15 posted on 03/22/2008 8:34:54 AM PDT by IllumiNaughtyByNature (Senator McCain, what did GWB promise you back in 2000? And you believed him? BWAHAAAAA!)
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To: Dems_R_Losers
Some folks have it harder than others. One of the things that bothers me is the headline here: "Weak economy". In other words: "Bush's fault".

If someone says "a lot of us could have saved more" then I see evidence that someone is taking a degree of personal responsibility and I can applaud that. But I think the media would prefer to push its usual agenda.

16 posted on 03/22/2008 8:35:28 AM PDT by ClearCase_guy
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To: nyconse
"That is what being family is all about. I would never turn away family in a bad situation. Life is not about how much you have, but how much you give. I truly feel sorry for those that think otherwise.

I have close friends who thought as you do. They're now 85 years old with their daughter, son in law and two grandchildren living with them. Not because of a bad economy (they moved in during the boom years) but because their daughter refuses to live a lifestyle any lower than what she had become accustomed to before she was married.

It's been four years now, with no sign that they'll ever decide to be out on their own. They don't love them any less, they just want them out.

The most destructive thing you can do for the people you love is that which they can and should do for themselves.

17 posted on 03/22/2008 8:45:33 AM PDT by joeystoy
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To: television is just wrong

The government isn’t a non-profit,they just like to buy votes on our dime.


18 posted on 03/22/2008 8:46:06 AM PDT by Farmer Dean (168 grains of instant conflict resolution)
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To: television is just wrong
Didn’t know the government was a non profit like the Salvation army or...

What planet have you been on? This kind of thing has been going on since FDR's 1935 Social Security Act.

There's no sense complaining about it, unless you have a realistic strategy to take us back to pre-1930s governance.

19 posted on 03/22/2008 8:48:05 AM PDT by Swordfished
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To: TigerLikesRooster

If you allow an adult child to move back in,at least make them pay their own way.For crying out loud-it’s never too late to at least attempt to teach some personal responsibility.


20 posted on 03/22/2008 8:49:51 AM PDT by Farmer Dean (168 grains of instant conflict resolution)
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