A study by the Census Bureau shows that more adults between ages 18-34 now live with their parents. In many cases, this group is challenged with significant student debt, a difficult job market, rising cost of living, and there’s now a trend of postponing marriage until a later age.
For many parents sharing their home with adult kids, it can be tempting to offer financial assistance to your child. However, be careful — any help you’re considering shouldn’t come at the expense of your own financial stability:
- Make sure you keep up your retirement plan. Helping the kids doesn’t mean reducing your retirement contributions, or even worse, withdrawing money from your retirement savings.
- Be careful about co-signing a loan for your child. Of course, you hope your child can handle the debt, but as a co-signer, you’ll also be held responsible. Therefore you should be fully prepared to pay back any loans if your child cannot.
- Have your child take responsibility for their own finances. At the least, they should pay you some rent and help with utilities. This not only helps you financially, it also teaches your child responsibility and will ease the transition when they eventually move out on their own.
At the end of the day, we all want to be supportive to our kids, but it won’t improve the situation if you can’t support yourself.
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