Supporting the Strouds is Walter’s income of about $75,000, which he earns as an associate director in the finance department at a large corporation. Tondalah no longer works full time because of sarcoidosis-related health issues. She focuses instead on the couple’s business, F.O.G. (Faces of Glory) Cosmetics, which grossed roughly $60,000 in revenues last year, up from $35,000 in 2008. The Strouds, who developed their own cosmetics line, don’t take a salary from the business yet since it is still getting established. They’ve decided to live with Denise until 2011 and have put themselves on a strict financial diet, investing only in their business, reducing debt, and purchasing just the bare necessities. Tondalah, for instance, says she sports low-maintenance hairstyles or has friends do her hair; Walter and William stretch out the time between haircuts. The family also packs lunches and nixes unnecessary shopping. “Now we have money going into a savings account, about $400 a month,†says Tondalah. “It’s important to pay yourself too as you’re paying off your bills, in case you have to exit sooner,†Walter advises.
Within the first six months of moving in with Denise, the couple used cumulative savings, including an income tax refund, to pay off $16,000 in debt, including four of their five credit cards, and $3,500 in medical bills. Tondalah and Walter agreed to share grocery shopping responsibilities with Denise and pay her $550 for rent, about half her monthly mortgage. Denise pays the utilities and occasionally babysits William. The situation, though hardly ideal, is win-win for both parties: Denise has paid off her car loan, and the Strouds have saved about $3,500 since moving in with her.
Setting Ground Rules
Yoli Marie, CEO of Financial Fitness Media and author of Financial Fitness For Young Adults (Financial Fitness Media; $17.99), says it’s important for boomerangers to nurture a wealth-building mindset. “It’s important to make up your mind that you want to experience financial freedom,†she says.
Like Tondalah and Walter, other boomerangers should contribute to the household to help keep the peace. “Whatever you can do to contribute monetarily, do it, even if it’s a token amount. That discussion needs to be had day one or before you move in,†Anderson advises. He says that contributing will help boomerangers feel less like freeloaders, and will also ease worries among relatives that their new houseguest is a potential moocher.
If you’re unemployed and living with relatives, consider accepting a job you wouldn’t normally take until you can get something better. “Where I’ve seen that situation work well, the dialogue has been up front, open, and honest.†Anderson points out, though, that in the African American community honest conversations about wealth building don’t often happen.
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