Determining How Much You Want to Assist Your Grown Children

One of the biggest questions — and, potentially, frustrations — facing you today may be how much you want to help your grown children live their lives. Increasingly, and especially during economic downturns, older Americans find themselves answering the front door and encountering their grown children, wanting to move back in or receive other financial assistance.

This need for assistance on the part of your children may frustrate you on a number of levels. First, you probably did not move back in with your parents after you left home, and you don't understand why anyone would find this necessary.

Second, you may have observed your children making poor financial decisions over the years and not feel a great responsibility to bail them out. Third, you may have paid for all or a large part of your child's college education and believe that you have done enough to get your child started in life.

Finally, you may have been looking forward to turning your attention inward, both emotionally and financially, and resent that your children are still so needy.

Even as you enter your fifties, your children may be nowhere near grown. If you had children in your late thirties or early forties, you may still have preteens around the house. If so, much of this section may not apply to you until you near 60 or 65.

Knowing Why Your Children Need You So Much

As a baby boomer, you were part of the first generation of Americans that, as a whole, planned for and attended college, graduated, found productive and high-paying jobs, and as you entered your middle years, were able to buy houses and brand-new cars with relative ease. Your generation was, therefore, better off than the generation before, which was better off than the generation before it.

This is not to say that your life and career have been easy. Your parents probably did not pay for your college education (if you were able to go at all), and you had to work very, very hard to afford the life you've lived. You survived several recessions and waves of layoffs. You've made a lot of sacrifices and done without so that your children would have a good life.

Unfortunately, because you provided so well for your children, they have grown up with almost no hope of doing better than your generation, and this is an unusual phenomenon. They've grown accustomed to a lifestyle during childhood that they can't afford as adults.

Children of boomers who go away to college aren't excited by the prospect of living in a dorm; they're horrified by the lack of closet space and missing amenities. They don't understand how much personal electronics and a new car actually cost. Yet as they graduate from college and seek jobs, many haven't been able to find jobs that pay enough to support the lifestyle that they grew accustomed to when they lived with you.

Today, houses cost far more as a percentage of income than they did when you were a young man or woman. If you sold your house recently, weren't you amazed that the house you paid $30,000 for is now worth $500,000? Well, your kids are amazed, too, when they try to buy houses like yours.

So, they've gotten themselves into massive debt trying to replicate the life you've had. They finance their houses on 30- or 50-year loans with no hope of ever paying them off, lease cars that they can't afford, and put most of their purchases on credit cards and store charges. And when those debts become overwhelming, they simply refinance their houses for another 30 years and start fresh.

This may have left your children with little ability to live within a budget, no equity in their houses, and an overwhelming desire to consume instead of save. So they turn to you for help, and you need to decide how much you want to give. Use WORKSHEET 20-1 to brainstorm ways that you might be interested in helping your children.

WORKSHEET 20-1

How Do You Want to Assist Your Grown Children?

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Helping Financially

Helping your children financially may range from bailing them out of credit card debt to paying for another college degree to giving them a down payment on a house. If you're able and willing to offer this kind of assistance, your kids will surely appreciate it. They may, however, continue to live above their means and wreak financial havoc on themselves and those around them.

Therefore, if you do offer to help your children financially, attach some strings, just as a credit-counseling agency or bankruptcy court does. Insist on getting a budget from your child that includes paying off all debt and putting money into savings over the next few years. At that time — and not before! — offer to give your child a down payment on a house or money to go back to school.

If your child and a spouse are going to move in with you, use adherence to a strict budget as the ticket to continuing this free rent. If they don't stick to a budget, they have to move out. You may even want to collect rent from them, put it into a savings account, and give it back to them when they are ready to move out. And do set a time limit on how long your grown children can live with you.

You may hear from your kids that because they didn't like their jobs, they quit, and they're now experiencing moderate to severe financial difficulties. Before you blow your top, keep in mind that personal satisfaction is much more highly rated now than it was when you were working at your first few jobs. Putting happiness in front of earnings is admirable; in fact, it may be something you've never done, and your child may need to hear this from you.

However, your grown child also needs to realize that a price comes with that commitment to his or her own happiness: Living a much more frugal lifestyle. Being a social worker or teacher may bring much more satisfaction than using the law degree that you helped pay for, but it also means your child is going to have to embrace an entirely different lifestyle.

Helping financially, and holding your kids accountable as you do so, doesn't mean you can't also give financial gifts that have no strings attached. Giving a check or a beautiful piece of furniture for a birthday or holiday gift will probably make you feel fantastic.

Don't get sucked into helping more than you want to. Your children may not realize that you don't necessarily want to spend every spare moment with your grandchildren. If your children begin to rely on you for this service, they may grow even more dependent on you.

Helping with Child Care

If you have the desire and time to help babysit your grandchildren, you may benefit doubly: You get to help your child while spending time with your grandkids.

Decide up front, however, whether you want your assistance to be official, perhaps in the daytime while your child works, or unofficial, such as babysitting your grandchildren while their parents shop or enjoy a night out alone.

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