When you reach the age of your 50’s, 60’s or even 70’s, you could be in the best-earning capacity of your life. Your career is at a high, and your salary reflects the years you’ve put in. However, if you have adult children that you’re continuing to support, it’s like a funnel draining the best years of your life away from you. We all want to see our children do better, but financially supporting them isn’t the answer.
If your child has financial issues, here’s how you can help without simply writing a cheque:
1. Set a limit. Letting your child know there is a dollar and time limit to your financial support spurs them on to getting themselves some help. This removes any frustration you may have as well with a long drawn out financial help.
2. Stay away from the retirement money. Don’t pull out your own money to help your children. You may rationalize this by saying they will care for you in turn. You may get penalized and fees for taking out money from your accounts and they become hard to replace. Find another solution, but leave your retirement vehicles intact.
3. Help them manage their own money with a budget. It’s more likely that your child will continue to ask you for money if their financial budget is made up of the words, “Ask the Parents”. Helping them get on their own feet means getting them financially smarter.
4. Identify their weaknesses. Is there some part of your child’s life that is causing continual strife? Helping work that out will help your bottom dollar. Is it a job, or a bad spending habit or an overbearing debt?
5. Consider lending a structured loan. Take your money seriously by not simply giving it out. Structure a loan with interest and repayments. Your child will be more conscious about asking for money if there are strings attached.
6. Seek a financial advisor. If the problem is hard to identify or deal with, get the advice of a professional with experience. Not only do they have an expert opinion, but they are also removed from the situation, which could really help you out.
7. Put yourself first. Don’t go into financial ruin to help them out. Your time is shorter than for them to get their financial affairs in order.
8. In your own budget, factor in all the money, you’re supporting them with. If you keep track, not only can you be aware of what you are actually doling out, you can use it to show them later should any conflicts arise.
9. Consider a non-financial solution. Maybe a temporary loan of your car might ease the burden. Or you could offer to let them stay with you on a temporary basis. These might not be as convenient as writing out a checque, but they still show that you’re willing to offer support and love.
Remember that there are options available to you if you have an adult child in financial need. You don’t have to go into debt yourself, but you can still offer help and support in a loving, generous way. Seek the advice of a professional and don’t let your feelings override your decision to support them. It may end up costing much more than you think.
Share this if you know of someone who might find this useful. Have a great week ahead!