Adult Children--Interesting
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| Mon, 12-28-2009 - 2:17pm |
I am pasting part of an article I read today regarding loaning your adult children money. I found it very interesting and it could be helpful one day to myself so I thought I would share. I realize that even though I am saving money for my kids for school it will not be enough and they may come to me for more, whether it has to do with school or not.
So here it is:
Article:
If your child does approach you for help, consider the following:
- Take your time to decide: you don't want to make this decision during a short phone call.
- Ask yourself whether the gift or loan will affect your relationship with your child, or with other children. You don't want to create sibling rivalry or find yourself resenting your child's daily spending habits.
- Be careful of putting yourself into financial difficulty: it's a new truism that you can borrow money for tuition much more easily than for retirement
- Offer advice before money: sit down and go over all the financial options with your child. But let your child take the lead in formulating a plan: its important that he or she be the person in charge of his or her finances.
- Distinguish between an emergency and a pattern. It may be okay to step in once: if you find yourself writing yet another cheque, ask why.
- If you loan money, write it down formally, including a payment plan. If your child doesn't know how the money will be repaid, decide whether you want to make it a gift.
- Get an expert involved: a financial planner or a debt counselor can provide expertise -- and an objective eye.
- Draw the line: once you've made a decision, stand firm.



Thanks for sharing Karen.
Kate
Thank you for the post. I posted earlier that we are in a similar situation, but instead of having loaned money to a grown child, we loaned money to my parents and it's been a pattern over the years and now we're seeing how bad the situation has been. I didn't realize how unhealthy it was, but my parents don't seem to care. Now that we've finally said no, they are very upset with us. They took advantage of us because we have said yes so many times that they ended up having to end their Christmas visit with us before Christmas and they had to go home.
Now everyone in the family is very tense. I should have known to say no, but just like when it's your children and you want to help out, it's the same with your parents who you want to help out. The difference is that in the advice given in this thread, you said stuff like this part:
- Offer advice before money: sit down and go over all the financial options with your child. But let your child take the lead in formulating a plan: its important that he or she be the person in charge of his or her finances.
That is super important when it's a child, but when the relationship is reversed, you cannot sit down and advise your parents! They still feel like they are to be the elder respected one. If you try to offer them advice, they take offense as if we are treating them like children.
My advice - don't loan money to family members, especially someone who turns around and expects you to respect them.