Two key mistakes that can endanger your retirement
It’s natural for parents to want to support their children, even as those children reach adulthood. But in tough economic times, parents must remember to look after their own financial well-being as well. Adult children may struggle financially, but they have many more years of full earning potential ahead of them than their parents do. So, parents need to be careful about jeopardizing their own financial situation to support adult kids.
Mark Patterson, a writer for usnews.com, shared the following two tips as part of a recent article on “attitude adjustments necessary for retirement success.”
1. Your retirement is more important than your kids’ college education.
2. Your retirement is more important than your kids’ lifestyle.
To view the full text of the tips, plus the three additional attitude adjustments Patterson suggests, click here.
Poll results: Should grown children pay rent when they move home?
Dallas Dirt, a real-estate publication in Dallas, Texas, recently published a poll asking readers whether adult children should pay rent when they move back home with their parents. The possible answers to the poll are:
- Yes, after college, absolutely.
- Not if they are in graduate school. After grad school, yes.
- Only after they have been working for awhile, to help them “get on their feet”.
- No but they should still contribute to the household financially and physically (chores).
- Grown kids should never return home to live with mom and dad.
- It’s up to the family to decide this case by case.
- Daddy should always pay for everything!
- The minute they turn 18 they should contribute to the family.
I’m not loving any of these possible answers. This is a complicated topic with no simple answer. I think the best answer is “It’s up to the family to decide this case by case,” except that in all cases the adult child should contribute *something* every month — if not cash, then they should still be paying a set amount of “rent” by working on extra projects around the house, like cleaning the gutters or painting the garage. (You can see my thoughts on adult children paying rent when they move home in the video here.) So, I guess if I were to write a possible response, it would be: “Yes, but the family should decide what amount makes sense based on their particular situation, and if no money is available, the adult child should work off the rent by doing extra jobs around the house (not regular chores).”
If you want to vote in the poll, you can do so here. If you’d like to see the results (in which a shocking 9% say Daddy should always pay for everything — I suspect those votes didn’t come from parents!), you can find them here.
Tips for adding your adult child to your health insurance policy
USA Today recently published a piece with some great tips and answers to common questions about how to add your adult child to your health insurance policy under the new rules. You can find all of those tips and FAQs here.
Will your insurance cover your adult kids who move home?
There’s a lot of talk these days about the new health bill and its implications for health insurance for families with adult children living at home. But health insurance isn’t the only kind of coverage you need to think about when an adult child returns home. What about homeowner’s insurance and auto insurance? A recent article from TampaBay.com addressed these questions. You can find it here.
Are your adult children “yuckies”?
Another new acronym has been coined to describe adult children living at home: yuckies. It stands for Young Unwitting Costly Kid.
The interesting thing is that so many of the adult children who still rely on their parents for financial support really are unwitting about the amount of financial pressure it can put on parents to support their children well beyond childhood. If your adult children are thinking about moving home — or are already there — make sure you talk to them honestly about any concerns you have about your own financial well-being, whether it’s major, like concerns about being able to pay the larger grocery or heating bills, or whether it’s a simple thing — like you’d been planning a vacation that you can no longer afford to take. A family budget can be a good way to get a clear picture of your boomerang kid’s impact on your household finances.
Video Tip: How much rent to charge adult children living at home
Are your adult child’s finances your business?
One of the biggest sources of conflict between parents and adult children living at home — in fact, between just about any adults who share a household — is money. In a recent column for the Washington Post, Michelle Singletary explained when — and why — and adult child’s finances are, in fact, their parents’ business. The column was written in response to a letter from an adult child living at home that began like this:
“My parents and I are at an impasse,” she said. “After graduating college, I had minor credit card debt. I asked to move into my parents’ home after living on my own for a while to get rid of the debt, and to get other finances in order. I wanted to do a reset and start off right before it got out of hand.”
To see what Singletary had to say about this hot topic, you can read her column online here.
More on how to talk to your adult kids about money
A few days ago I posted a link to a Washington Post column by Michelle Singletary, inc which she talked about when adult children’s finances may be their parents’ business. Today, I’ve got a link to the transcript of a live online chat Singletary hosted, where she answered questions about various topics. With her column fresh on their minds, many people asked for more information about dealing with adult children’s finances. It makes for an interesting read, and you can find it here.
20% of fathers willing to help adult kids with $20,000 or more
A new survey from CreditCards.com shows that 20% of fathers would help their children to pay off $20,000 or more in debt, even without expecting to be repaid. Just 12% of mothers said they would make the same decision.
In both cases, parents were willing to help pay off credit cards, a mortgage, or student loans, and were much less likely to help pay off gambling debts.
You can read an article about the survey here.
Teaching your adult children about investing
If you’re planning on helping your adult children out with a financial gift, it can be a great opportunity to teach them about investing. After all, the goal is for your adult children to someday become financially independent, so any tips you can give them now to help them toward that path will benefit everyone later.
This article from Carrie Schwab-Pomerantz of Charles Schwab & Co., Inc. offers some great tips for how to turn a financial gift into a life lesson in financial management.