Not only do children keep you up at night and drain your bank accounts, but new research from the National Endowment for Financial Education suggests that twenty-somethings continue to inflict financial pain on their parents even as adults. That’s largely because some 40 percent of 20 and 30-something children still live at home, or have until recently. As a result, parents report that they’ve had to give up privacy (30 percent), take on debt (26 percent), delay major life events such as getting married or buying a home (13 percent) and delay retirement (7 percent).
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Parents, concludes NEFE, are sacrificing their own financial health to help their needy children. In many ways, this is old news—after all, Matthew McConaughey and Sarah Jessica Parker starred in Failure to Launch back in 2006—but there is a new wrinkle, and that’s the economy. Parents just don’t feel like they can say “no” to their children when they’re unemployed or otherwise beat-up by the sluggish job market. According to the NEFE survey, one in three parents think that their children are facing greater financial pressures than they faced at the same age.
NEFE recommends these seven steps to help your adult children without sabotaging your own finances:
1. Think like your son or daughter. Find out why she wants to live at home and how it will help, and how long they plan to do so. Talking out all the repercussions can help them think through the benefits (and downsides) of moving back home.
2. Crunch your own numbers. Parents often don’t even realize how much it will cost them to invite their children to live back at home. Between grocery bills, utilities, and other extra costs, it can add up. To avoid big surprises, try to anticipate those expenses in advance, and figure out how to offset them.
3. Write some ground rules. Do you want a move-out date? A contract for shared housework? Putting it in writing can help avoid misunderstands.
4. Share costs. Come up with a plan to enable adult children make a financial contribution, or at least to help with chores around the house.
5. Lend a hand. Adult children often need help figuring out their finances and their careers; perhaps you can help them make connections or provide pointers for beginning budgeting. Make a list of career goals together to help them see what they’re moving towards.
6. Check in regularly. It’s hard to walk the line between being overbearing and being helpful, but many adult children benefit from regular check ins, especially if they’re feeling lost.
7. Don’t forget about yourself. After your adult child has moved out, think about what you each learned and what you need to do to get your own finances back on track.
Is it harder to say “no” to helping adult children in today’s economy? Should parents say “no” more?