It is not unheard of for college graduates or older children to ask for financial assistance from their parents. These young consumers seek the assistance of their parents for a number of reasons such as unmanageable student loan debt, high rent or even the possibility of not being able to land a decent job after college.
It is also possible that parents made mistakes when teaching finances to their children and they are now experiencing those money mistakes. They might have miscalculated their living expenses and do not have enough to live on their own. There are also some who wants to postpone looking for a job and just wants to move back and relax for a few months.
But majority of college graduates still wants to leave their college and universities with a clear financial direction such as getting a job or putting up their business ventures. Not a lot of young graduates want to be dead weight that is why most of them puts in a lot of work even before graduating to secure their future source of income.
This might be a lot easier for people who graduated with an engineering degree as Payscale.com shares that petroleum engineers takes the highest salary at an average of $184,000 at the most. They might have an easier time managing their finances with their salary almost triple of the average household expenses at $50,000.
Helping your older children
If you find yourself on the receiving end of your children’s request for financial assistance, there are things you can do to address that awkward situation.
- Set rules if they move back in. Businessinsider.com shares that 53% of 18-24 year old children are currently living in with their parents and the more shocking is that more than 80% of seniors in college has a expressed their plans of bunking back in their old rooms in their parent’s house. You need to set rules if they decide to move in back with you such as chores that they need to do when they come back or if they need to shoulder a bill especially if they are already working. They are living under your roof so you can also dictate house rules such as throwing out the trash or even curfew.
- Financial support must be discussed. You do not just give hand outs to your children when they ask you for money. You need to discuss with them where they will use it and if you have extra funds, use it to help your children with the important ones like student loan payments or house payments rather than for their summer vacation or buying a gadget they do not need. You need to also put limitations on the amount and frequency of giving because as you get older, money get harder to get and earn. You might be getting the money you are giving to your children from your retirement or reserve funds which put you and your children at risk of getting into debt in the future.
- Hand down pieces of financial advice. Apart from financial assistance, it might also be a valuable idea if you give your children financial tips and pieces of advice which they can use to properly manage their own budget. You are in a great position to do this as you have already gone through that infancy stage putting together a budget from scratch. You can guide them on what to concentrate on first and what to start saving for, like a retirement fund so they can have a good start
- Introduce them to the right people. Another thing you can do for your children is introduce them to the right people in your network that falls squarely into the industry they are trying to get into. You can either get a meeting with people who you think can help or at the very least point them in the right direction. Remember that when you were their age, you might have also been running blind not having the direction you need to make it in your profession.
- Be serious with your retirement fund. A shortage in retirement funds is a big deal when the time comes that you need it because if you really do not have enough and you can no longer work, your next option is to ask from your kids. This is why focusing on your retirement fund is just as much a financial protection for your kids as it is for you when you get older. It might be a little difficult to understand but you need to focus on your retirement fund first before your children’s college fund.
Getting them prepared in life
As you try and help your children with financial assistance when they get older, here are a few things you might want to consider doing before that happens.
- Start teaching financial management early in life. Their first teachers will be you at home and you can already prepare the in managing their own money in the future by giving them money lessons while they are still young. Teach them how to handle money so when they grow up, they have an idea how they will budget their finances or at least they have a starting point to go from.
- Set up a college fund for your children. As soon as you have your reserve funds and retirement funds set, you need to start working on your children’s college fund. SEC.gov shares that the 529 plan is tax-advantaged program that is meant to entice parents to save up for college money for their chidlren. This is a good start in helping your children but you need to discuss this with your children so you can both work together in funding it. They can get summer jobs and put the money into that fund or use any monetary gifts from relatives to increase their college money.
- Draft a will to get your inheritance in order. This is something you need to carefully plan as you get older to help your family after you move on. This is one of the financial tips to keep in mind when a loved one passes away because this is meant to put all those properties and investments in order and not give your family a hard time dividing them up.
- Get your spouse in on the financial plan and goals. It is hard to do everything on your own especially if you are already married. Let your spouse in on your goals for your household’s finances because they can help you get there. They might even have ideas on how to make your financial goals a lot easier to reach. It pays to have a partner in your goal of securing your family’s finances.
There are so many ways to give financial assistance to your kids when they get older especially when they decide to go back to their old room in your house. It should not always be a hand out because you will only make them more dependent on your dole outs and not work for their own money. Help does not only come in the form of money but also in parenting advice of helping them move in the right professional direction.