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

Money Matters: What if the kids are over their heads in debt?

It's one thing to struggle with your own fiscal problems--retirement looming, nest egg shrinking. But it's even worse to watch your kids fall into debt. What do you do about that?
That's a question raised in a recent Washington Post column, which advises parents of grown children NOT to denude their own assets in an effort to save their children. Certainly, putting ourselves in a position where we are no longer self-supporting is dangerous. But sharing some of our assets with a child who runs into fiscal trouble can be the right thing to do--depending on the situation. As I see it, the help line can be drawn between a child's bad judgment and misjudgment.
Here' are highlights from the column: 

Don't jeopardize your own finances in order to help your child, particularly if you’re nearing retirement age and have a fixed number of years to build up/resuscitate your savings plan. Borrowing from your 401(k) (if there’s anything left in there) or tapping a home equity line of credit to help pay off your kid’s debt isn’t a great idea.

Don't be afraid to pass judgment on your child’s debt. You’ve weighed in on everything from the cleanliness of their rooms to their Friday night date, so why should debt be any different? You may decide to treat student loans or health-care costs as worthy causes while credit card debt from that new flat panel TV is not. The last thing you want to do is enable them to continue what could be a vicious cycle of spending.

Treat a loan to your adult children as a full-fledged loan, complete with interest. (If that makes you feel guilty, you could always return the interest to them after the final payment as a surprise.) As with any loan, write down the terms of repayment and decide what the penalties should be for late or missed payments.

Refilling the Nest: Two is company, three is crowded

The semester is almost over. The students who went off to college as overgrown teens are heading home for the summer as adults. A friend's son, after two years of struggling with college courses, is coming home for the duration--to figure out what he'll do next, what he wants out of life, whether further schooling is for him. It's a tough time for him--and for his parents. 

His imminent arrival feels, says my friend, "like an invasion of my space." He'll be bringing home--to the house where my friend and her husband comfortably raised two children--all his clothes, sports equipment and odd pieces of furniture he picked up to furnish an off-campus apartment he shared with friends.

But I don't think that's what she means by an invasion. The physical presence of a young adult who's in some turmoil and the daily reminder of that internal contest is not to be discounted. And that's what I think she means when she says, "The house is too small for three adults."

Returning to the Nest: Do you still have to wash their socks?

They're moving home again. Sixty percent of young adults move back home--staying for no one knows how long.  The rules of the house that worked so well when they were youngsters don't quite apply now. So how do you work things out? Do you ask them to pay rent, lay down cleaning and cooking rules? Do you still wash their socks?

I found some pointers recently on how to manage the move-back so that everyone remains on speaking and civil-living terms. The advice sheet notes that happy “re-filled" families tend to have several things in common. Here they are in brief:

Set limits: Talk about how long the live-in arrangement will be: three weeks, three months, a year? And define mutual expectations for house rules and responsibilities.

Set Goals: Talk frankly about the reasons, financial or otherwise, behind this new living arrangement, and lay plans for the transition back to independence.

Discuss Rent: Some families start at one rate. Then, as an incentive for their child to move out, they raise the monthly rent a predetermined amount as the months tick by. Others charge rent, but set the money aside and present it as a nest egg when their child is ready to move on.

Set Chores: Whether it’s in lieu of rent or in addition, include household chores--making dinner twice a week, for example, buying groceries, doing laundry or yard work.

Discuss Guests and Booze: It's unrealistic to set curfews for a fully-grown, independent adult, but you can discuss and agree on a set of household rules, particularly on hot-button issues such as late night or overnight guests, relationships, and alcohol or other substance issues.

Make a Contract: Whatever the plan, whether it’s rent, chores or household rules, spell it out beforehand and put it in writing.