pigybank.jpgIt seems that many college graduates are moving back in with their parents while they try to get their feet planted in the professional world. Most parents want to do everything they can to help their children, but at what cost? If your child is moving back in, don’t roll out the red carpet just yet. Think about what financing their lifestyle is going to do to your retirement years. Instead, opt for gentle, but firm strategies to help your children start supporting themselves. It will be better for everyone in the long run.

You can help them to identify sources of credit and jobs that might help resolve their issues. Discuss the pros and cons of different types of loans whether they are installment loans, online payday loans, or even revolving credit card accounts. Just don’t make the commitment to cosign or pay off a debt that is only going to enable your children to delay growing up and taking responsibility for their own lives.

Ask For Rent

So, maybe your kid got a bachelor’s degree in chemistry and is waiting to make the big job score. That doesn’t mean that in the meantime he or she can’t work a part-time job to help pay the rent. Ask for rent, if they are choosing to move back home. You can still cut them a great deal, but make it clear that rent is not free and they are now adults. They need to start learning how to support themselves.

Don’t Get Involved With Their Finances

Don’t pay off their late bills or take collection calls for them. If they are having trouble making ends meet, then ask them how they plan on paying their debts and engage in financial discussions if you are knowledgeable about different financial strategies. It’s important that you don’t offer to solve their problems for them and let them find ways to creatively manage their own life. If they keep leaning on Mom and Dad, they may never learn how to grow up.

Don’t Borrow From Your Retirement

If you have extra in the bank that is not in a retirement account, then this can be used however you see fit. However, when it comes to borrowing from your retirement account, the cost is too high. Once it is gone, how will you take care of yourself once you are older? Don’t expect that the same generosity that you are willing to exemplify will come back to you when you get older. By then, your children will most likely be wrapped up in their own lives with spouses and children to remember the money they borrowed from your IRA.

Talk About Money

It’s still the great taboo: Talking about money. It’s also very important that your children learn how to manage money at an early age. It should be done at the very least as they are getting into high school. They should understand how a loan works, what a credit score is, and why credit cards may be difficult to pay off. You should discuss the difference between good debt and bad debt. Hopefully, your children will learn from your example how to manage their resources so that they can live well within their means. It’s amazing how much impact a parent can have on a child’s mindset when it comes to keeping up with the Joneses. If you weren’t that motivated to do so, your children may find it’s not necessary for them to do so as well.

Teach your children the value of good habits. Knowing how to cook at home and eating healthy are habits that pay well as time goes on. The less they eat out, the more money they have to help them get on their feet. The healthier they eat, the less chance they will promote good health and avoid certain cancers or diseases that are affected by poor diets. Not smoking is one way not only to save tons of money in cigarette prices, but it adds healthy years to your life as well.

You can talk about other types of loans, like online payday loans, and your views on whether they serve a good purpose or not. You can show them that any loan is useful as long as it is managed well. Managing debt is a fact of modern life. They can start on small loans like online payday loans, which are limited to $600 or less, to help them understand the pros and cons of borrowing and paying back a debt.

Other articles of interest: