Some parents who welcomed the empty nest as a time to finally focus on their needs may be feeling the blues as they find themselves in a boomerang generation.
The boomerang generation is where adult children have left home, only to return after their wings were cut.
“It may take longer to reach your goals now that some empty nesters are experiencing a boomerang of adult children returning home, but it is important not to change the goals but to change your plans in achieving your goals,” said Karabo Ramookho, strategic retail manager at Old Mutual.
You were probably looking forward to the freedom of not having to take care of your children financially and made plans to celebrate your new independence with a holiday to your dream destination.
Young adults find themselves in a position where they have experienced a salary cut or were hit by retrenchments – and do not have the financial means to honour their financial commitments such as car instalments and rent, and may be forced to move back to the parents’ home.
“You are now faced with financial challenges that you may have never thought to be possible. You probably haven’t discussed this topic and the subsequent financial fallout with your financial adviser that is now affecting both your and your child’s finances. Let a financial adviser help coach you to reach your end-goal by making necessary changes to your financial plans,” urged Ramookho.
“At Old Mutual, we have more than 175 years of experience in helping customers reach their end-goal by uniquely tailoring their financial plan despite tough economic times.”
Three ways to remain nimble and ride out the storm:
1. Budget
- Draw up a new budget that takes your income and expenses into consideration.
- You can sign up for the 22seven app that automatically pulls up your actual expenses from your bank statements to help you better understand your spending habits for you to save. Click here to start
- Use Old Mutual’s budget tool to help you keep track. Click here to start
- Be specific on how much you can spend on each expense and stick to it.
- Help your children to draw up a budget once you’ve done yours.
2. Hold an open family meeting about finances
- Family discussions about finances are often taboo or just never discussed in family circles.
- The family must talk about finances and teach children to budget and save. By discussing the family expenses and income, children are better able to understand what their parents can afford.
- It is essential to discuss how deferred savings will affect the parent’s retirement planning.
- Invite your financial coach to help the family to live within their means while still saving for the end-goals by mapping out a financial plan.
3. Settle debt
- Many South Africans are over-indebted in the current harsh economic environment or may have had to incur debt to make ends meet as a result of a reduced income during the lockdown. It is therefore vital to develop a timeline for paying off debt and not to increase debt during the boomerang phase.
- The longer you’re in debt, the longer you’re paying interest to someone else – either the bank or a short-term lender. If interest rates increase, it will mean that you will pay even more.
- It’s worth sucking up the short-term pain to free yourself of short-term debt by doing without nice-to-haves for a while.
- Pay off your debt with the highest interest rates first.
- Consolidate your debt into one loan with a lower interest rate.
Let your financial coach help you take steps to still reach your financial goals by mapping out a financial plan for you and your children.
Old Mutual Retirement competition
Old Mutual is running a competition to better understand who you are and what your financial needs are. By participating in the competition you stand a chance to win one of three voucher prizes, worth R1,500, R1,000 or R750, from any of our Rewards partners.
How to enter
To enter, visit MyBroadband and BusinessTech and complete the online form and survey fully. The survey will take less than 3 minutes.
The competition will run from 1 September 2020 to 25 September 2020. Winners will be announced on 30 September 2020. Terms and conditions apply.
Click here to enter the Old Mutual Retirement competition.
This article was published in partnership with Old Mutual.