23% of British baby boomers financially support adult kids
According to an article in the Telegraph:
One in four – 23 per cent – give regular financial help to their grown-up children and seven per cent have adult offspring living with them who don’t contribute financially to the household.
As we discuss in our book, it’s inappropriate — potentially even damaging — for adults to live at home without making some sort of financial contribution to the household. Even if they can’t pay market rent, it’s important for your adult children’s self esteem to feel they are contributing, and it’s important for you to have help with the additional expenses (electricity, gas, phone) you incur because of the extra person living in your home. You can read some of our tips here.
FHA reform bill may help your adult children buy a home
With housing costs way out of reach for many young adults, especially in the face of the current economic crisis, often the only way for adult children to get out of the parental home is with a significant “bail-out” from mom and dad.
Peter G. Miller, author of Common-Sense Mortgage, has a suggestion for a better way to help your adult kids buy a home:
As a parent you can always give a gift to a child to help them buy a home. But a “gift” is something that you don’t get back and doesn’t pay interest, not an option for a lot of families that are not among the rich and famous.
Under the new FHA package, however, there is a delightful option: You can give the children a loan and it will count as “cash” for FHA downpayment purposes.
This is likely to be a better idea for most parents than an outright gift. You can structure the loan as you like, maybe not requiring payments or interest for awhile, or maybe not requiring repayment after so many years. And you can forgive the debt in your estate, if you want.
You can read the rest of his article here.
Expert says establishing boundaries is #1 step
In a recent article from EnterpriseNews.com, Helen DeVries, director of the doctorate psychology program at Wheaton College offered the following advice for families with adult children moving home:
To make it work and ensure things stay amicable rather than resentful, you have to frame it more like you’re cohabiting with roommates. In that scenario, there’s a splitting of chores and errands. It’s easy to slip back into the routine you had pre-college, but you have to try to make it more collegial than hierarchical. Parents need to say ‘We’re delighted we’re able to help you, but you’ll be expected to cook one night a week or do all of the ironing or give us X amount of dollars for the cable bill.
One of the families profiled in the article used a contract to set the terms with their adult child — and everyone seems pleased with the results. You can learn more about how to create a contract for adult children living at home here.
Lessons learned from “The Nest”
We told you about an Australian reality show called “The Nest” that dealt with the issue of adult children living at home.
With the show having wrapped, the show’s financial expert has written an article sharing his thoughts on some of the lessons to be learned from the show. Here’s an excerpt:
One of the main reasons adult children continue to live at home is that it gives them a leg-up financially.
Yet none of the adult children on The Nest, including those in their late 20s, were any better off for all the benefits of being subsidised by their parents. Living at home had not made them better money managers. Quite the reverse.
Most had credit card debts. None had any savings to speak of.
Here’s the rub: letting them stay in the parental pad long after their education commitments had finished had hurt them more than it had helped them.
It was clear that the parents were killing their kids with kindness.
In our book, we discuss strategies for setting up financial arrangements that work for all members of your household, including any adult children who may be living at home, so that no on bears too much of a burden and everyone learns about responsibility. You can find our tips here.
Are you helping your children… or stifling their independence?
Just because your adult children are living at home, that doesn’t mean you need to continue to support them in the same way you did when they were kids. As we discuss in our book, providing too much financial support for your grown children can hold them back from establishing their own careers and developing sound financial management skills.
This article, based on the book “Does Your Bag Have Holes” by Cameron C. Taylor, uses simple stories to illustrate why letting your children find their own wings can be the best thing you ever do for them.
Who pays for grad school?
With so many adult children returning home after completing an undergraduate degree, families are facing a new question: who pays for grad school? A generation ago, it would have been virtually unheard of for parents to pay for a master’s degree, but with many grad school students or applicants still living with Mom and Dad, parents may end up bearing some financial burden when their kids go to grad school, even if they’re not paying the tuition.
This article offers tips on how to help your adult kids decide on financing options for grad school — and whether it makes sense for you to help foot the bill.
Your health insurance may cover your adult child — up to age 30!
Many states are passing legislation that requires employer-provided health care to extend coverage to dependent adult children living at home well past the tradition cut-off age of 19 for non-students.
For example, in Kentucky adult children lliving at home must be covered by the parent’s employer-provided health insurance up to age 25, whether they’re students or not. In New Jersey, depending on the situation, your adult child may be covered up to age 30.
This article looks at the issue from the employer’s perspective, but it also provides a good overview of what the new trends in legislation are. Take a look to see what teh current guidelines are for your state, then make sure you take advantage of them!
Tax break for adult children at home?
UK parents with adult children living at home may be able to get a break on council tax if the adult child is on income support or income-based Jobseeker’s Allowance, or if they’re a student.
Make yourself and your adult children happier by redefining your relationship
When parents and children live through tough times together, a bond forms that can make it difficult for either the parent or the adult child to deal with the idea of living apart from one another. This phenomenon is called “enmeshment.”
But in the end, adult children must eventually strike out on their own and build independent lives.
U.K. newspaper columnist Dr. Cecilia d’Felice gives some advice to families in this challenging situation in her column this week.
Ann Landers dishes advice on dealing with adult children
Today’s “Classic Ann Landers” features two questions on dealing with adult children, including one 21-year-old stepson who lives at home and sometimes has his girlfriend sleep over.