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How to get adult kids off parents’ tab

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KANSAS CITY, Mo. -- Out of habit and love, parents find themselves footing the bill for their adult children long after college ends.

The support ranges from occasional help to full dependence. Parents are helping with all living expenses, but mostly with housing, transportation and insurance.

The Harris survey shows that 59 percent of parents with adult children are providing some financial support to their grown children. Harris says that this number is a record. Experts cite three reasons for the increase in parental financial support: record-high student loan debt, a new "child-centered" society and the fact that we don't teach our children to manage money.

The average student loan debt load has doubled in the past 20 years from $12,000 to $24,000. It has been harder for recent college grads to service or pay off this debt due to the trouble they've been having getting career jobs. However, that excuse is quickly fading as our economy continues to improve and more jobs become available. Note for parents of current college students: Don't allow your child to overborrow. Because loans are available now for living expenses, it is very easy to borrow too much. Try to limit borrowing to what is needed for direct school costs -- tuition, fees and books.

Sociologists have noticed that in the last 20 to 30 years we have become a "child-centered" society. We are providing the best lifestyle we can for our children, and we are creating the expectation that they can maintain this lifestyle upon entering adulthood. When they can't do it on their own, we as parents are stepping in to cover the costs.
We simply don't teach money management to children.

Everyday life in America today is all about immediate gratification, made easier by the proliferation of credit cards. Banks issue credit cards to college students knowing that they may not have the ability to repay the loans but that the parents will step in and do it. Shame on them.

So should parents be concerned about reversing the effects of these problems? Yes, say financial planners. Otherwise, parents are risking their own financial health, and that is not good for them or for their children. According to Harris, 26 percent of parents have taken on additional debt in order to help their children. Approximately 10 percent have put off retirement and another 10 percent have put off moving due to the costs of supporting an adult child.

How can you get your kids off of your payroll? Just do it. Stop paying for things. Show some tough love. Let them fail and learn. Let them ride the bus, pack their lunch, work overtime, take a second job and clip coupons. It is the only way they will appreciate money, but be there for them with a guiding hand. They will more likely be willing to listen and learn after they have a stumble, so that stumble could be a very good thing. Keep in mind the consequences of not showing tough love -- you could create a monster.

I have seen it happen. More than once. And when your child is ready to listen and learn, stay there to monitor and guide them through it.

If you have questions for FOX 4 financial expert Kathy Stepp, email her at kathy@steppandrothwell.com.

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