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Sunday, December 14, 2008

An Idea We Can Hate Even More:
Boomerang Families

Hat Tip: Rosie has self-identified. Thanks Rosie.

I figured someone would eventually suggest that families should share living expenses by living under one roof. I've been joking with my husband for a long time that tuition boards will not only be imploring families to ask grandparents for funds, but will be asking kids to move back in back with grandparents as an alternative. (Somewhere I once read about a principal who told a parent that their working son should help pay for the younger sibling's tuition, but I can't find my clipping).

Well, someone finally did suggest the idea, but not in regards to tuition. That someone would be a Jewish Press columnist, Moshe Kupfer, writing a column When The Going Gets Tough... While the idea of multi-generational households may seem unusual, it has been done before and is still common amongst immigrant groups. And, I know more than a handful of young couples, with anywhere between zero and four children,that have moved in with their parents. And I'm sure this arrangement will become more common in a down economy.

But, where the columnist sees numerous advantages in multi-generational households ("free" babysitting, , I see numerous issues sure to creep up, especially if more than one couple decides to try to exercise the option. A lightbulbesque joke might be, how many boomerang children does it take to exceed fire code?

Mr. Kupfer writes, "And for the most part - what my peers would consider the "too close for comfort" living arrangements - worked. Financially, the households benefited because there were two, three even four incomes coming in to pay the bills. Mothers could work, because Bubby, Granny, or Savta was home to watch the kids - or there were several aunts to do so. " (Orthonomics asks: why are Bubbies, Grannies, and Savtas always the ones expected to raise the children. Perhaps Granny would like to take a job?)

Mr. Kupfer points to farming families and post-World II immigrants as examples. I would point out that in the former example, all families living together were working together towards a common cause and the equity that they were building was their collective equity. The same goes for urban families living above a business in a multi-generational setting. While John milks the cows and his wife Jane feeds the chickens, aunt Jill watches their children (or more likely, puts the kids to work scrubbing potatoes). Everyone is working, serving a function for the entire group, and everyone gets paid (at least in theory). I know plenty of grandparents providing free babysitting in the here and now. I don't know anyone giving Zaide and Bubby a cut of the profits.

Every year, right around Pesach time, Jewish publications are filled with letters from disgruntled Grandparents whose children made themselves right at home. After a week of cleaning up every one's mess, cooking for a crowd, and providing free babysitting to more children than they can count, these grandmothers are ready to hang up their boots. Many of these grandparents are already providing "support" and I'm guessing that the reason many of these grandparents are providing "support" in the first place, rather than suggesting the couple move right in after the chuppah to share costs, is because it is the easier arrangement.

Can you even start to imagine the type of fights that will happen if Moshe and Shmuel move in with the grandparents with their wives and kids? Moshe sees advantages of having numerous adults in one house: "And the children benefited because there were so many adults to run to for help, comfort or just attention. If Mommy wasn't available - then Bubby was. And there were several pairs of additional eyes watching out for them." Sometimes I see the advantages of having extra sets of adults (and cousins) around too. But, the novelty wears off pretty quickly.. . . .or at least that is my own experience. Different disciplining styles, different expectations of adults and children, different consumption habits, different eating habits, different cleanliness and organization habits. Yeah, the novelty wears off quickly.

The columnist writes: "As the saying goes - there is safety in numbers - in this case, your financial safety. Living with family and thus substantially reducing expenses will take a ton of pressure and stress off a young father's shoulders and help the family save money."

Multi-family arrangements will likely be more common. If the financial details can be worked out satisfactorily, there is sure to be a financial benefit. But whatever "pressure and stress [is taken] off a young father's shoulders" will likely be placed squarely upon the womenfolk's shoulder's.

50 comments:

Margaret said...

It's your token gentile reader again. My parents and I have discussed the issue, and we all hope that I will be able to find a job that will boomerang me back home for a year or two after I graduate this May. The way we figure, I'll pay to rent my room, which my parents will use to cut down their mortgage payment and I'll save money by not having to pay full rent my first few years out of college. I'll be able to pay off my student loans more quickly. I think it's a good plan.

SephardiLady said...

Hi Margaret! Goodluck with the boomerang plan and paying of the student loans quickly. Just make sure expectations between you and your parents are clear because it isn't easy going back home. . . or at least that was my experience. :)

triLcat said...

My parents and I lived in the same house for three years after I left the college dorms.

For some kids, it works. There are personality issues, expectation issues, and more. (I'm 30, and married +almost 2, and my dad still tells me to take smaller bites when I eat at the same table with him!)

I know people who've done it successfully, but it's a tricky, messy business.

And yes, it's an idea we can all hate even more.

That said, there are times when it is a good idea and does work.

triLcat said...

Btw, in case it wasn't clear, it did NOT work for me.
Living 3 blocks away works fine, though, most of the time.

ProfK said...

This plan depends on factors being there that aren't borne out in real life practice. I am a member of the "Bubby" generation as are most of my friends and family members. We aren't at home waiting to take care of the grandchildren; we are out working. I know only two women my age group who aren't working, and they have retired and/or are taking care of aging parents.

In an emergency families do what they have to do--short term. But to suggest this as a long term solution? No way. There is a reason for why God gives children to younger people, not older people. If you are past the age of bearing children you are also past the age of raising children. Unless of course Mr. Kupfer is planning on moving in with me also and being "Bubby" to two younger generations.

JS said...

The question is whether this will become the only option for some people who can't afford their mortgages currently or who have option ARM mortgages which are about to balloon.

I also wonder whether yeshivas should be telling people to get rid of their houses if they don't pay anywhere near full tuition and most of their income is sunk in a gigantic mortgage.

It was a bit different a few years back when houses were still so expensive. But now, housing is far, far cheaper and a family could easily turn around a huge, expensive house for more modest accomodations.

A couple we know just bought a 3 bedroom house in the community on a short sale for a little over $200K. There are many houses in our neighborhood running for similar prices. It seems to me a yeshiva should tell parents to take this option - it makes financial sense for everyone involved.

Lion of Zion said...

JS:

"I also wonder whether yeshivas should be telling people to get rid of their houses if they don't pay anywhere near full tuition and most of their income is sunk in a gigantic mortgage."

yes

Dave said...

Depending on when they bought their houses, and whether or not they drew against their equity, they may well be underwater, and would need to pay to sell the house.

JS said...

Well, what is better? A family continuing to pay on an upside down mortgage that everyone else in the community is subsidizing by paying for their tuition? Or the family taking a hit and buying a much smaller house for cheap in this down real estate market?

I can't speak for everyone else here, but I'm rather pay a one time subsidy to help get that family out of that upside down mortgage and into a house they can afford if it means they can now pay more tuition.

Anonymous said...

JS, the house may not remain upside down forever, and now may be the WORST time to sell.

Anonymous said...

And the one time subsidy may be as much as years of tuition.

rosie said...

I am the reader that is free to identify. Maybe those of us who marry off our kinderlach before they are self-supporting should expect to be more than just grandparents in name only. To turn a bunch of early 20somethings loose to raise kids by themselves is nuts. We who made the whole thing possible should stand responsible.

miriamp said...

Well, I'm not moving in with my parents or my in-laws any time soon, especially as I wouldn't want to live in either city, having tried both. Nor are any of them moving in with us -- they wouldn't fit in my current house. Also, while my parents are retired, my in-laws aren't, and their jobs aren't portable either.

I'm sure that there are many many families it wouldn't work for -- but if all the parties involved are willing, then why not? I have friends who bought a 2-family house together with her parents for just that reason. It works for them.

Lion of Zion said...

DAVE:

tough luck. let them sell their house and compensate for any financial loss by living for a few years in a crappy one-bedroom rental (like some of the people who've been subsidizing their irresponsible purchases).

SephardiLady said...

JS-I don't believe the hit will be a one time hit. Those who get themselves in a financial jam are more than likely to do so again without a huge Financial Makeover of their own making. Too often those with too much debt load end up right back in the same situation again.

SephardiLady said...

Rosie-Thanks for self-identifying. Couldn't agree with you more that self-supporting should be a test for marriage readiness.

Dave said...

It is unclear to me if they even can sell it. It would require the bank to agree to a short sale.

I think you'd be better off removing housing expenses from consideration on financial assistance for students.

Lion of Zion said...

SL:

"Couldn't agree with you more that self-supporting should be a test for marriage readiness."

i always say that couples should not get married until they can pay for their own wedding.
a) weddings expenses will drop precipitiously when the couple has to absorbs the costs themselves
b) if you can't afford a modest wedding then how will you afford the first year

DAVE:

i don't claim to understand the finances of the housing market (yes, i am a bitter apartment dweller), but aren't there still people who bought houses let's say 10 years ago and have some equity left so they would not be selling short? (or has housing come down *that* much).

Anonymous said...

SL, maybe you can comment on the practicality of selling a house that has been paid into for 10 years and does have equity (LOZ's comment) in order to finance tuition. Aren't you a proponent of retirement savings, of which a house can be an important part? Just where does this end (other than public school for all)?

SephardiLady said...

Anonymous and LOZ-I will try to comment later.

SephardiLady said...

One note: I believe that if we were to rent a home if would cost us more than our mortgage. Of course the savings we worked our rears off to save are caught up in the equity. But, in a number of years our mortgage payment will be zero and rent will be ?????

Lion of Zion said...

ANON:

"Aren't you a proponent of retirement savings, of which a house can be an important part . . ."

speaking for myself, i don't really care if we're talking about living accomodations, retirement savings, ten-children families or annual pesach vacation splurges. tuition should not be a vehicle whereby one person subsidizes another.

i don't want to sound cruel. i'm not saying we shouldn't help each other out when there are extenuating circumstances. but many people are have irresponsibly boxed themseves into a situation whereby they all but guarantee they will never be able to afford full tuition. and that is not fair to the rest of us.

Anonymous said...

But LOZ, lots of people box themselves in. What about people who choose a low paying profession (eg academia) over something more remunerative (Eg medicine) because that is what they enjoy? How is that less irresponsible? If people know they plan to send your children to private school, they should plan their careers accordingly.

triLcat said...

Anon 3:44

Exactly. If you plan to have many children and want to send them all to private school, you need to plan your career accordingly and not just expect charity from the community.

Anonymous said...

I'm anonymous 3:44 and of course what I meant to write was "If people know they plan to send their children to private school..."

Lion of Zion said...

SL:

"I believe that if we were to rent a home if would cost us more than our mortgage . . . But, in a number of years our mortgage payment will be zero and rent will be ?????"

i don't know about where you live, but here in the center of the jewish universe you can get a nice apt. for under 1,500 a month. most people i know have mortgage payments in the 3-4k range (and my friends bought at the lower range of the jewish housing market).
so for 30 years you are paying at least double what it would cost to rent.
then there are all the extras that you continue to pay even *after* the mortgage is payed off: taxes (8-15+ k in the suburbs here, and its going up in the city as well), insurance, maintenance, heat, repairs, repairs, repairs and repairs. i understand that a lot of this tax deductable, but you never get it all back (is there is a ballpark general percent figure that is thrown around for these types of conversations?)

Lion of Zion said...

SL:

i wrote that comment in part to play devil's advocate. but rereading it now i'm blown away that my friends in the suburbs pay more in property taxes alone than i pay in rent.

ANON:

"What about people who choose a low paying profession (eg academia) over something more remunerative (Eg medicine) because that is what they enjoy? How is that less irresponsible?"

its not any less irresponsible. our first task is to provide for our families. enjoying youself while you do that is a bonus not everyone can afford.

what i have no answer for is in regards to professionals such as social workers, etc. who are necessary for society but will never make $

triLcat said...

LoZ: That's why most children are conceived by two parents, and why there are public schools.

Something's gotta give. You can't both work low-paying jobs, have many kids, and send your kids to expensive schools.

I maintain that tuition subsidy is charity, and charity is meant for those who fall upon hard times, not for those who act irresponsibly

Anonymous said...

It's not always that unfair to the grandparents. Remember that at some point as they age and/or get sick, they may need their children or grandchildren to live with them to help care for them to avoid having to move to an (expensive) assisted living facility or nursing home.

SephardiLady said...

It seems to me that this proposal is a one way street, rather than something intended to be mutually beneficial. The kids go out to work, pay minimal living expenses, while Bubby looks after the kids. If the plan is to help Bubby and Zaidy avoid nursing homes, someone needs to be the homemaker.

frumhouse said...

This proposal sounds like the next step up in taking advantage of parents who are already buckling under the financial burdens of supporting married children.

It makes sense from a practical standpoint - why not stop the charade that married children are independent adults capable of supporting themselves and simply move them directly into to Daddy's house after the chuppah?

Adding an addition to the parent's existing home or making renovations to accommodate the married couple/family is surely a cheaper and more sensible investment than renting them their own apartment.

Anonymous said...

Sounds like we are moving down the road toward Swifts "A Modest Proposal".

Commenter Abbi said...

frumhouse: It's a matter of cultural expectations.

In Arab villages here in Israel, what you describe is precisely the norm: Parents add floors to houses for each child that gets married and they basically an extended family lives in what ends up to be a 4-5 floor apt. building.

The Western cultural expectation is that everyone should eventually be on their own. That's not the case in all societies around the world.

mother in israel said...

Not Swift but eugenics--only the Jews with skills and talent to command high-paying jobs can have lots of kids and send them to day school.

Al said...

MII, on some level that seems better than the status quo... where only Jews without the skills and talents to command high-paying jobs can have lots of kids, because the marginal cost of an additional child is nearly zero because of welfare (government and Jewish), and the Jews with the job skills for the 21st century can only have 1-2 kids because they have to pay tuition, where 1/3 of tuition goes to pay for their child, 1/3 goes to pay for another child, and another 1/3 goes to complete and total waste because the schools employ useless people that are related to the politically powerful. At least with tuition as eugenics, we'll be getting more Jews that can support themselves plus the community, with tuition as birth control, we are getting more Jews that can't support themselves, and less Jews that can.

Anonymous said...

"If you are past the age of bearing children you are also past the age of raising children. "

this is ultimately a value judgment that cannot be "disproven," but two interesting notes:

(1) i read a study about how children cared for by grandparents have lower injury rates that children cared for by third parties or parents.

(2) some evolutionary biologists suggest that the very reason women live so long after they lose fertility (as opposed to men) is that grandmothers provide support to the second generation of their offspring. you can frame that without the evolution, too, if you like...

I also agree that the social tensions many of us feel inherent in parents living together with grown children are culturally conditioned - in cultures where it is normal to live together, people just do it, and don't feel as put upon. (They might feel put upon if they had to live alone...) Each way of doing it has its own pros and cons, so i'm not saying we should go out and recreate the clan-living culture just yet, but the point is that the emotional burden of living tobgether is not ontologically unavoidable.

tesyaa said...

Well, my husband's grandmother was no sociologist, but whenever she saw a little kid go whizzing past her, barely avoiding bumping his or her head on the coffee table, she'd let out a gasp and say, "That's why G-d doesn't give little babies to old ladies."

Though there are plenty of younger grandmothers, and I'm sure their outlooks would differ.

Anonymous said...

LOZ - I don't know about where you live, but here in the center of the Jewish universe you can get a nice apt. for under 1,500 a month. most people i know have mortgage payments in the 3-4k range (and my friends bought at the lower range of the Jewish housing market).
so for 30 years you are paying at least double what it would cost to rent.


At least 30 years! Please remember that the "trick" of refinancing to a new 30-year mortgage every time rates go down has the side effect of lengthening the term of the mortgage. If you bought a house 8 years ago, and then refinanced 4 years ago to get a better rate, and then refinanced (into a new 30-year loan) this month to get even better rates, you have effectively created yourself a 38 year mortgage. By the way, just to forestall such comments, this doesn't mean that it is a bad choice to refinance for a lower rate (it is usually a good choice).

Mark [who has only had, and still has, one mortgage in his entire life - from about 10 years ago]

tesyaa said...

If you can manage slightly higher payments, 15 year fixed rate is the way to go.

Lion of Zion said...

TESYAA:

what do you consider "slightly higher"?

Anonymous said...

it seems that all of the assumptions are that the parents are better off financially than their children. what if that is not the case? the article refers to "free baby sitting". does that also include "free bubbe sitting"? will the children then care for their parents who might have lost their retirement money in the financial debacle we are now seeing?

SephardiLady said...

Anon-Agreed. I predicted a while back we would soon hear about the "retirement crisis" where parents are not able to hold down full time work, but don't have enough to cut back. Unfortunately, after what I read today, I'm thinking that crisis is coming sooner than we thought.

LOZ-One extra mortgage payment a year (mortgage only, not mortgage plus escrow) will knock 7 years off a loan. If a person doesn't overbuy, they should be able to pay off a house early. We have always held 30 year loans, but try to make at least an extra payment. We figure if we can't afford that, we don't belong in the home.

Anonymous said...

SephardiLady - One extra mortgage payment a year (mortgage only, not mortgage plus escrow) will knock 7 years off a loan. If a person doesn't overbuy, they should be able to pay off a house early. We have always held 30 year loans, but try to make at least an extra payment. We figure if we can't afford that, we don't belong in the home.

But an even better option is to save that extra mortgage payment each year. After 23 years (or so), you have enough saved to pay off the mortgage. This is very similar to paying an extra month of principal each year, but has a huge added advantage - if, God forbid, you ever have a big emergency during those 23 years (perhaps a burst pipe between the street and your house or something similar), you have easy and ready access to that money. If all that money went to the mortgage company as principal prepayments, you might not have easy access to it (especially if the emergency happens right in the middle of a credit crisis when home equity loans are very difficult to get).

Also, this "mortgage payoff savings" doesn't negate the absolute necessity of having an emergency fund of at 3-6 months (and some say 6-12 months) of normal typical expenses to cover more typical emergencies (such as the loss of a job, illness, etc).

Mark

SephardiLady said...

Mark-Cash is king. There are all sorts of great things to do. . . but an emergency fund is a must.

JLan said...

"But an even better option is to save that extra mortgage payment each year. After 23 years (or so), you have enough saved to pay off the mortgage."

I'm thinking this one through, and I'm not actually sure that it works. Part of the point is that paying the extra payment each year knocks down the principle, which in turn knocks down the interest paid the next year (more of the next year's money goes towards principle than it would have). By the time you hit 23 years you've paid most of the interest anyways.

Keep in mind that if you can find a 30 year mortgage without early payment penalties at the same rates as a 15 year mortgage, it may be better to go with the 30 year one, so that if, chas v'shalom, you've been paying extra and something bad happens, you can reduce your payments without falling behind. Of course, this only works if you have enough to cover tuition on your own and have enough self discipline to pay early.

SephardiLady said...

JLan is correct about the principal. Always important to ask about pre-penalty payments, but I have yet to run into a mortgage with a pre-penalty payment, although my parents always ask about it. I'm wondering if such loans were more popular 40 years ago than now.

Dave said...

The sub-prime loans often carried pre-payment penalties; it meant that refinancing had to happen with the same bank, or they got a nice cashout.

tesyaa said...

LOZ, I don't have the amortization schedule in front of me and I don't feel like doing the calc right now, but I recall the difference being less than 20% higher payments for the 15 year loan. The loan rate is lower on the 15 year loan, which helps. You build equity much faster and pay much less interest over the life of the loan.

Anonymous said...

My sister in law and her family share a two family with my in laws. My mother in law retired and watches my niece for which she is paid a small amount of money seems to work well

Charnie said...

Getting back to the original subject, there clearly do appear to be cultural issues at play here with how successful multi-generational living can be.

Where I live there are many immigrants who are Bucharian, and they are building enormous homes. (Where they're getting the multi-millions that this costs is clearly another topic). However, it is my understanding that not only do the grandparents live with the family, but a good part of their extended families as well. Isn't this common in Japan as well?