A recent article from Moneywise Magazine offers some great tips for helping your children become better money managers. why is this important? Well, according to the article, your adult children may be bouncing back to you for financial support for much longer than you think — and they may think that’s just fine:
A recent study by The Children’s Mutual has identified a new generation which considers itself to be ‘financially independent’ while still accepting parental subsidies for everything from day-to-day living costs to house deposits. The study suggests that this generation is set to keep bouncing back for support, and this could have a serious impact on some parents’ financial futures.
The article offers tips to help children learn to manage money starting when they’re infants. You’ve probably missed that opportunity with your kids, but the article also provides helpful tips for university students and adult kids over age 21.
For adult kids, the most important tips is to understand when helping is really helpful, and when you should let your kids find their own way. Here’s what the article suggests:
When you should bail your kids out
* Medical bills: If your child has an accident or falls ill, you should consider paying for medical costs if it gets them fit and well quickly.
* Legal costs: If your child has to fight a legal case they would benefit from help with the bill, especially if the situation has arisen through no fault of their own.
* If they’re in danger: If they have naively got involved with drug dealers or loan sharks and are in physical danger, it would be wise to bail them out.
* To further their career: Supporting your child through a work experience placement or internship, or buying them a car to travel to work can be a good long-term investment.
When you shouldn’t bail your kids out
* Bank overdrafts and credit card debts: If they’ve got into debt as a result of hedonistic living, helping them pay their debts won’t help them learn to manage their finances.
* Speeding tickets and parking fines: Children of any age need to learn that their actions have consequences, so make sure they pay off fines themselves.
* If it puts your own finances under strain: Adult children should be able to stand on their own feet, so don’t give them money if it leaves you struggling.