Time.com has a helpful slide show of 10 tips for parents when their adult kids are just starting out, have debt or are just bad with money.
Some of the tips are obvious such as let them fail sometimes, encourage or help them pay off their student loans (as we already learned this week) and encourage them to save.
One of my favorite tips is charge rent if they try to come back home. Not charging them rent, feeding them and God Forbid doing their laundry is not going to encourage them to leave. My brother came home for short stint and my mom made his life for uncomfortable. He quickly moved back out. (Funny thing is I don’t think she was trying to annoy him I just think she wanted her house kept a certain way.)
I can’t pull the whole list so make sure you click through but here were a few I thought were the most interesting. Here are a few of the tips from Time.com:
No. 1 : Claim them on YOUR taxes: “…The unemployment rate for 20- to 24-years-olds is 15% and so it’s likely that many college graduates, and even not-so-recent graduates, will want to return home for a bit. If that’s the case in your family, don’t miss the financial upside: You may be able to claim your new “houseguest” as a dependent and get a tax break of $3,650. The IRS says you can claim your child as a dependent if they are under 24, spent more than four months of the year as a full-time student, live at home and rely on you for at least half of their annual expenses. After 24, the rules change. Your child no longer has to live at home. But they have to make less than $3,650 a year, and still rely on you for half their annual support.
No. 4: “Keep Your Credit Separate: Adding an adult child to your credit cards or establishing a joint account might seem to be an easy way to repair or boost their credit. But it may not be as good of an idea as it appears, especially if your child has had problems with debt in the past. Studies have shown that three-quarters of co-signers end up paying the loans taken out by their less thrifty credit partners. What’s more, if your child misses a payment on a joint card, it will drag down your credit score as well. That may make it tough for you to borrow should you run into an emergency.”
No. 8: “Be Aware of Income Tax Rules: If you are giving money to your grown children after they move out of the house, that money is considered income for them. Parents are allowed to give $13,000 ($26,000 for couples) tax-free each year to each of their kids. More than that generates a taxable event. If you want to give more, consider paying for your kids to finish college or get another degree. Education spending, as long as you pay it directly to the school, is exempt from the gift-tax cap. Because most people do not work in the same field as their major, even with a college education your child may benefit from more training or schooling.”
How are you financially educating your younger kids, tweens and teens? Are you doing any of these steps on the list? Do you have kids back at home with you? Are you charging rent? Did you get a credit card with them?
What were you biggest successes and failures with your adult kids and money?
– Theresa Walsh Giarrusso, ajc.com Momania. I have increased my Twitter activity. I am sending out great stories for moms each day focusing on health, fitness, sex, entertainment, food, travel and obviously parenting! So follow me on Twitter at @AJCMOMania!)