Money and Your Almost-Adult Children: Best Practices

by Jenn

Everywhere you look, you see news saying that college costs more and jobs pay less than in the past. The financial deck seems stacked against your kids. At the same time, you want to launch your nearly or barely-adult child into the real world with a sense of financial savvy and responsibility. You only want what’s best for your kid, which seems like it should be easing those financial burdens if you can, but is that really the way? Below are a few things to consider as you struggle to do what is truly in the best interests of your almost grown-up child.

Start Early

If your child is 18 and heading off to college in a few months and you’ve never taught them much about personal finance and how to save money long term, there’s still time, but ideally, this is something you’ve spent your whole life teaching your child about in age-appropriate ways. Letting kids save up for things they want and having them participate in discussions about how to spend discretionary family money are great ways to teach them about the value of money and how to be responsible. Other actions, such as helping them open a checking account and giving them a low-limit credit card when they are teens can give them the chance to start using these types of tools in a low-pressure environment.

Paying for School

Higher education really is more expensive than it has been for previous generations, and student loans can be crippling. You don’t have to shoulder the entire cost of your child’s college education, but they’re also not going to cover tuition, room and board waiting tables, which might actually have been possible a few decades ago. This is where you may want to consider a low-rate Private Parent Loan. Having the option of parent student loans offer you the opportunity to help your children financially with school even if you haven’t been able to save up much yourself. It’s also a much better option than digging into your retirement account to help your kids.

Lifestyle After School

What are your obligations once your child has graduated from college and is, ostensibly, an adult? Depending on your child and their situation, you may need to set money boundaries both to protect yourself financially and to ensure that your child is able to achieve financial independence. It’s a good idea to be specific, such as setting time limits on how long you will pay for something or being clear about what you expect them to pay for. It’s okay if your child has to move into an apartment they don’t love with roommates or buy a secondhand car. 

At the same time, you don’t want them to go without health insurance. One of the big things a parent may want to consider helping out with is the down payment on a home. It can be tough to come up with the money needed, and increasingly, the young people who are able to purchase a home are the ones who get help from their parents.

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