Financial Aid And The Adult Child

It is the desire of every parent, to educate their children and to see them move on to become self-sufficient. With today’s challenging global economy, however, there is a huge increase in the number of dependent adult children. Described as “the worst job market in a generation”, huge numbers of graduate adult children face more economic uncertainty than their parents who were born at a time of relatively greater opportunity and promise. A challenge of 21st century parenting is the sheer number of dependent adult graduates. The question is, have today’s parents raised a generation of pampered youth who are unable to cope with the real world? Or, is today’s world just so difficult that they are unable to make their way without our assistance? At what age or stage are your children? Have they completed their education? Are they looking for jobs? Have they started work? How much do you continue to support them? Do you give all that they ask for or just a part. Will the money help them to become more self-sufficient or will it just lead to more and more requests for help? The answers will vary from family to family. Consider these scenarios and see where you fit: - You feel that your financial obligations end when your children graduate. - You support your children financially, and expect to do so for the rest of your life. - You will give your child the first few months’ rent and a security deposit for a new apartment and then they are on their own. - Your child can continue to live at home, rent-free and doesn’t need to contribute to any of the household expenses. - You will set them up in an apartment which you will fund until they are on their feet. - You have educated your child and will not give any further financial support, either because you cannot afford to, or you choose not to. When should you step in and when should you hold back? Take time to analyse the request carefully, particularly if a significant sum is required. Is there a genuine need? If they desperately need the money for an important, legitimate need and you can afford it, then there is no harm in giving or lending as the case may be. Most parents would step in during a true emergency, such as if a child or grandchild needs medical care, or school fees must be paid to keep children in school. It is wonderful to be able to support your children but for a great many parents, continuing to financially support adult kids has serious implications for their financial future, particularly retirement. If you sit down to actually assess the numbers in terms of how much longer you must continue to earn, it puts it into perspective. Remember you need to look after yourself so that you do not become dependent on them in later years. Every child is different. Take a good look at your each of your children’s money personalities and the family dynamics. In the same family, you will discover that various children deal with money matters differently. You find one child has been frugal from their earliest years, whilst another who is a spendthrift and extravagant, has a sense of entitlement. Some children are simply unwilling to accept that they may need to take a step down on the economic ladder when they leave home. Indeed, many young adults seek to imitate their parent’s lifestyle that has taken nearly a half-century to build. Be conscious of the emotional impact for the whole family, of financial aid. If the handouts are jeopardising family relationships and finances, then things need to change. When adult children constantly demand and receive money, the feelings of dependency that this creates, can lead to resentment. Parents too may feel resentful, about being constantly pressured to provide. The psychological dynamics get even more complicated if some adult children are getting help whilst others aren’t. You find families where for example two self-sufficient daughters deeply resent the large sums being spent on their spoilt brother; they may feel that they are being penalized for being financially responsible. There is a fine line between helping and spoiling your children. How much are you really helping by keeping them dependent on you? If they know that they can always come back to you for a bail out, how will they learn to deal with financial setbacks or how to manage their own money. Studies show that the more dependent children are on their parents, the less able they are to be economically self-sufficient. Of course it makes smart economic sense for a child to move back home where life is comfortable with full board. As mean as it sounds, by allowing adult children to live at home rent free with no obligations or responsibility whatsoever, is not teaching them financial responsibility. At a minimum they should be encouraged to cover some basic expenses whilst putting away some savings to prepare them for the realities of starting out on their own. Even if money is no object for you, make an effort to wean your child off you financially, and consider ways to help them more self-sufficient. If you are going to help a child pay off mobile phone or other debt, put something in writing clearly stating the terms including interest and repayment schedule. Clear expectations and defined limits are always better for all parties. Adult children also need to know in advance when financial aid will begin to be withdrawn and may eventually stop. Saying no is one of the most difficult things for a parent to do, but sometimes you have to step back, take a deep breath, and let whatever happens, happen. Even if some pain results, your child may just learn some valuable life lessons before it is too late. They might not appreciate it now, but remember that your efforts to make them financially self-sufficient will ultimately result in more balanced, more purposeful and more empowered adults; the alternative can be grim.

Source: http://www.punchng.com