The markets fell last week due to a combination of factors. The credit-rating agency Fitch downgraded US debt from AAA to AA+, based on both growing government debt relative to GDP, or Gross Domestic Product, and the political stand-offs and brinkmanship we’ve seen on both side of the aisle.
Beyond that, travel, ecommerce, and chip companies reported less-than-expected earnings. In addition, the Bureau of Labor Statistics released its jobs report. What would seem like good news, that the economy added 187,000 jobs last month, the unemployment rate fell, and wages rose another 0.4%, has led some analysts to worry the Fed will continue increasing rates. A recession is seeming less and less likely, and if one does appear, should be mild. The consensus is that the Fed will raise rates in September and then hold for some time, but that’s not guaranteed.
Rising costs, especially for rent, has driven many adult children to return to the nest, according to Thrivent’s “Boomerang Kids Survey.” If this is you, it’s important to set expectations up front around financial contributions to the household, as well as pitching in for chores. The survey showed a significant difference between what parents want and can afford, and what grown children think their parents can afford. In fact, 53% of the children felt their parents could fully support them, but only 16% of parents were financially able to do so.
I’ve seen intergenerational households work amazingly well when everyone contributes, and everyone has their own space. Agreeing up front, including a signed lease and list of expectations, can reduce friction. If George and Jane are providing a place to live, what does that include? Meals? Laundry? How much will Judy pay in rent? Does that include utilities? If Elroy is unemployed, what’s the timeline for finding a job, or reasonable activity goals such as job applications. Do Judy or Elroy have to walk Astro, or mow the lawn? What’s the game plan for them to eventually move out? Get it all down in writing and then hold the adult children accountable.
If you don’t need the money they are contributing, you can always set it aside, and give it to them when they are ready to move out. Alternatively, you may decide this works for your family, and it becomes a permanent arrangement. Either way, setting expectations is the key to having a full nest again.
Your action item this week is to take a deep breath. I recently gave a friend a sticker that read “Every dead body on Mt Everest was once a highly motivated individual.” Use the summer break to reassess your values and align how you spend your time and money with what really matters to you.
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 Market Watch, Stocks turn lower by Christine Idzelis andJoseph Adinolfi, 08/04/23