A quantitative comparison of financial wellness between boomerang and non-boomerang children ages 18-35.

摘要

Children returning to the parental home after an initial launch into adulthood are a worldwide cyclical phenomenon. This study compares the financial wellness between the boomerang child and the non-boomerang child in the United States, exploiting personal financial ratios as a means to assess financial wellness. The financial characteristics of adults ages 18 - 35 were studied using the Federal Reserve Board's (FRB) Survey of Consumer Finances (SCF). The Non-boomerang group consists of 828 respondents; the boomerang group consists of 59 respondents. According to Greninger et al. (1996) an acceptable threshold for liquidity ratio and asset allocation ratio are 2--1/2 months and 0.15 respectively. A Mann-Whitney U test was accomplished to form a comparison between each group. A 95% confidence level (p ≤ .05) was established and the results of the Mann-Whitney U test for the liquidity ratio assessment are (Mann-Whitney U = 45309.00, p =.343) and the asset allocation ratio are (Mann-Whitney U = 16716.50, p =.000). This study found no statistical significance between the groups based on liquidity ratio; however, there is a statistical significance between the groups with regard to asset allocation ratio. A non-significant result in liquidity ratio indicates that boomerang children have acceptable levels of liquid assets to meet the liquidity ratio threshold. However, they do not have enough assets to meet the asset allocation ratio threshold. There may be several reasons for this result including boomerang children are now living at home to save enough money to eventually leave the parental home and increase their chances of successfully maintaining their own residence. The Great Recession, due to the bursting of the housing bubble and the rapid increase in unemployment, increased financial hardship for many households. This may have been a contributing factor to the increase in the numbers of boomerang children.