Assessing Your Adult Child’s Financial Situation

In last week’s article we discussed how to talk with your child about their financial situation. Once you’ve initiated the conversation and are willing to financially assist your adult child, here’s the next step you should take.

Assess Your Adult Child’s Financial Situation

Ask your children to honestly answer the following questions. It will give you a realistic picture of their financial situation:

How much have you been able to save for yourself? For example, if they are asking for big-ticket help with the down payment for a home, they should be able to show what resources you are bringing to the transaction.

How much do you really earn? Your children may be underemployed for whatever qualifications they have, but they need to be honest about their income and how much help they really need.

What debts do you have? Your children should list every single debt they owe and the total amount as well as the interest. You as the parents may know about your kid’s student loan, and have an idea about their vehicle payment, but you need to know about credit cards and consumer debts that are putting your kid’s financial situation at risk.

What are your expenses (and are they realistic)? The parents might look at their child as a fashionably dressed adult, carrying the latest smartphone or gadgets, and wonder why they need to fork over money to look after some specific “need” while their child seems to have no problem handling their “wants.”

What is it that your parents will be paying for? If your child is looking for help with tuition for education, they should be able to demonstrate how that credential or course will benefit their salary prospects.

Is this a loan you’re asking for or a monetary gift?

If it is a loan, how do you plan on paying it back (e.g., monthly payments, yearly payments, whenever you can)?

Asking these questions will help both you and your adult child to assess their financial situation, and help you to lay out a plan for financial assistance.

For more guidance in navigating through the Bank of Mom and Dad, read Derrick Penner’s book available through Self-Counsel Press,, Chapters Indigo, as well better bookstores across the country.

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