Should You Help Your Adult Children Financially?
Should You Help Your Adult Children Financially
?It's a trend so popular they've made a sitcom about it and it's not outsourcing or globalization. Coming to a home near you is Boomerang Kids, the term used to describe the 85% of college seniors who plan to move back home with mom and dad after they graduate, according to CNNMoney.
As unemployment continues to rise, many parents will soon see their older adult offspring returning to the nest too. So what is a parent or a returning child to do? Parents want to do the right thing but at the same time they need to consider their future well-being and happiness. Is selling their future structured settlement payments the right option? While you could just laugh, point and say I told you so, the guilt would never allow you to do such a thing. Before throwing caution to the wind and dipping into your savings or annuity, consider the following suggestions first.
Before giving or lending money to your children see if any of the follow applies to you:
You have less than six months of your monthly expenses saved in an emergency fund (See our emergency fund calculator)
You have credit card debt
You live paycheck to paycheck
You borrowed against your 401k and have not paid the money back yet
You have not adequately saved for your retirement
You are unemployed or facing unemployment
You have an annuity or structured settlement you could sell but if you do you won't be able to make ends meet.
You have bailed your child out numerous times and they continue to get into debt over and over again.
If you answered "Yes" to any of these questions, you are not in the position to give or lend money to your children. As for number 8, it is time for some tough love. If you are in the position and want to help them financially establish clear guidelines. For example, if it is a loan set up an amount, payments, etc. in a contract. Make your child be responsible. If the money is a gift define your expectations up front. Create an open dialog with them about their finances.
Even if you cannot help them financially, teaching your children budgeting skills as well as how to research their financial decisions will help them become responsible and independent. Our financial tools can help you guide them in the right direction. Remember, if you want to sell your annuity payments you can sell a portion of your payments instead of the full amount. In addition, they may be able to sell their unused items on eBay or Craigslist to get money.
She/he is my child/grandchild I can't throw them out on the street
While you are under no obligation to take care of your child or grandchild once they've reach adulthood, they're still family and you want to help them. But you should set guidelines in advance such as rent, chores, house rules, guests and alcohol/smoking use. Is there a set date for how long they can stay? Are there any consequences for not obeying the rules? Even if they can't afford rent they should still earn their keep. The free ride is over and mom is not a synonym for maid. Also, if your child has a child, you need to establish rules regarding babysitting as well. (Kiplinger offers a great sample contract). Endlessly Comfortable : Kidsline Bedding Child Custody Laws in Michigan The most Important skill your child could Acquire Cure Child Eczema- Proven Book To Rid Eczema For Good Or Just A Hoax? Pro Solution Pills Spicy Dating Tips For Teen Girls What You Really should Know Earlier than Hiring a Child Support Lawyer Michigan Child Support Laws in the State of Michigan What kids can do in Dubai? How Can a Child Custody Attorney in Michigan Assist You? Childhood Obesity Epidemic Welcome DIARY OF A WIMPY KID join the Blu-ray on August Chandeliers For Children's Bedrooms Pinpointing Child Support in Michigan