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.

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.

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.