Parenting Grown Children: What Dr. Spock Forgot to Tell Us

When the grown kids move back home: Here are some survival tips.

The economy's been brutal, and especially so on the generation that's just getting started on its careers and on those the next rung or two up. We who have retired or are close to doing so are probably in better shape--despite losses in the 401k. So it's not surprising that a recent poll by Grandparents.com finds we are the well-tapped Bank of Mum and Dad. Three-fifths of 10,000 recently surveyed grandparents said they have been providing some sort of financial support to their grown kids and grandkids in the last 12 months.

For some, that helps includes housing: the adult children move back in, some with their kids. Whatever the arrangement, financial advisers say parents need to take steps to protect their own finances, such as making sure their homeowners and auto insurance will cover the adult children and even grandchildren that are now in residence.

For more tips, check out these ideas from the experts. Here's a shortened form of the tips that go beyond the usual.

Avoid reverting to decades-old behavior, from when the adult children were still teenagers, when it comes to bill paying.

As emotional and relationship issues collide with financial issues, the older parents need to be wise and cautious. At the same time, they can demand that their adult children share personal financial information.They don't have to share theirs.

Older parents should try to keep a budget while their adult kids are back at home so that they can avoid going too heavy on withdrawals from retirement accounts"Just give kids a place to stay and help them until they get back on their feet." one expert says. "They just need to have a reasonable lifestyle."

Retirement funds should be kept separate from funds used to run the household.

If you were planning to give gifts anyway, don't be afraid to spend money on them now. It just means you'll leave less in your will or give smaller presents in the future.

While older parents are the executives of the household, rules--about buying food using the phone or computer--should be crafted together.

Money Matters: An Aussie take on what we can afford to give our adult kids

The economic retrenchment is, as we know, global. We aren't the only families having to pull back financially, and that includes support for our grown children--be it paying off a college debt or helping with the down payment on a house. A report out of Australia mirrors what many here are experiencing.
Evidently, the hard times down under are silencing the peal of wedding bells. Here are some highlights from a report by the St George Bank:

Generation Y expects parents to help pay for weddings, house deposits and education fees, but concerns over retirement and debt have taken priority for most mums and dads.

70 per cent of baby boomers believe the global financial crisis has seen their assets shrink in value, and 71 per cent are now concerned about their financial health. As a result, only 6 per cent of parents rate providing financial assistance to their adult offspring as a top priority.

Almost half of those parents with adult children said they were focused on saving, either for retirement (25 per cent) or other future expenses (24 per cent).

Another 41 per cent favored paying off debt, either their credit card (24 per cent) or mortgage (17 per cent), the survey showed.

Bottom line: “Circumstances have changed for many and it’s understandable that parents are now having to focus on their own needs and financial health,"a general manager of the bank said. “As a result, when it comes to paying for things like weddings, first home deposits, overseas travel and childcare, many Gen Ys must now stand on their own two feet.”

Empty Nest Redux: When the kids come marching home again

This just in from Great Britain. A survey by Selftrade of 2,000 Brits on fallout from the current economic downturn finds that "50% of British adults have been forced to make a ‘Plan B’ in the last year, as their lives have taken a surprise turn in a different direction. In 87% of these cases, a life change drove a major shift in financial outlook and habits."

While the survey identified "the need for people to empower themselves by taking control of their finances to secure against financial difficulties should a lifestyle U-turn be necessary," what was of interest to me--and presumably, readers of this blog--is the finding on how parents of adult children were reacting. Here's the excerpt on that point:

"The Forever parents
An emerging social trend in “Recession Britain” is the growth of the multi-generation home. Parents who experienced the surprise return of their adult children back home went through a number of sudden financial shifts. Suddenly devoid of their independence they were the group least likely to put themselves first (14%) or to be selfish when planning financial goals (15%). They were also the group most relaxed about taking on more debt (12%) and were least bothered about boosting their savings (10%) or investments (17%) - probably because they had little left over that they could put away."