By Manisha Thakor
A recent Pew Research report highlights a growing trend: in these tough economic times, an unprecedented number of adult children are receiving financial help from their parents. According to the report nearly half of adults ages 40 to 59 have provided financial support to their adult children in the past year. Put differently, Pew Research indicates nearly 40% of all Americans between the ages of 18-34 currently live at home with their parents or moved back temporarily in recent years.
With the average graduate’s loan debt at an eye-popping $27,253 , a big reason kids are moving back home is because of rising education costs. With double-digit rates of unemployment among Americans ages 18 to 24, the poor job market is also a contributor.
One other factor at play – that is slightly easier to control but much less discussed – is the lack of financial education for the younger generation. Fewer than half of the 50 states make high school students take an economics class, and just 13 states require a personal finance class as a prerequisite for high school graduation, according to a 2011 survey by the Council for Economic Education. That may mean you will have to fill the education gap with your adult children.
Here are some tips to help your children learn how to fly out of the financial nest on their own wings.
This kind of open dialogue can be even more awkward at first than the “bird and the bees” chat. However, pushing through the momentary awkwardness can yield big dividends by staving off a source of stress that could put a rift in your relationship. Being bold and brave about the money talk with your adult children puts you on solid footing to truly enjoy each other for years to come.
Manisha Thakor (Harvard MBA, CFA) is founder and CEO of MoneyZen Wealth Management, which provides integrated, holistic financial life planning and investment management for women and families. She is a frequent commenter on issues of financial literacy and co-author of two books on personal finance.
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Manisha Thakor is not affiliated with the TIAA-CREF organization.
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