Help Your Indebted Child Just Enough
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credit: Omar Omar
Parenting is never easy, and in a time of growing economic crisis, teaching your child financial responsibility is even harder. So hard, in fact, that your adult child may someday come to you, asking for help out of a sticky financial situation. If that day comes, MSNBC has a few tips on how (and if) to help an adult child with debt:
- Look at the big picture: If your child has a history of financial distress, there comes a point when you have to stop bailing him out. But if this is the first time, and he has a good reason for asking for help, consider what he’s asking.
- Set limits: Make sure to communicate your terms of help. If there’s a limit to your help, it might be just the motivation needed for your child to get back on financial track.
- Gift or loan?: This is a very personal decision, and its answer will be different for everyone. Keep in mind that you can only gift $12,000 tax-free to an individual, but a loan amount is unlimited.
- Suggest credit counseling: Your child might benefit from credit counseling, even if he hasn’t been irresponsible. Taking on credit for the first time can be a big decision, and a counselor may be the best way to guide your child.
- Always start early: It’s never too early to teach your child about financial responsibility, so let your child manage his own money from an early age, and reap the rewards later.
For more tips, see the MSNBC article.
Tags: Budgets | children | credit | Debt Management | Kids and Family
This entry was posted on Friday, June 20th, 2008 at 3:30 am and is filed under Debt Management. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
