If your children are in their 20s it’s easy to worry about them. It’s difficult for kids to be self-supporting after college these days because jobs don’t pay that much and the cost of living keeps going up. That’s not a good combo and it’s a problem for a lot of people.
According to a study done by Sallie Mae, 50% of college students fully expect their parents to help them financially for at least 2 years after graduation. Throwing the kids a bone for a couple years after they graduate might be OK – as long as the rules are clear. But how do you make sure the kids ever get to a point where they don’t need your financial support? In my experience, there are 5 steps:
1. Ask Permission
Since you’re the one writing the checks and/or putting a roof over their head, you might feel that you have the right to talk to them about their plans. Think again.
From a logical standpoint, I actually agree you should be able to butt into their business since you are paying their bills. But the problem is they don’t see it that way. And until they do, your words will fall on deaf ears.
Many kids today see post-college parental support as a parental duty – not a magnanimous gift. If you expect appreciation, you may have to wait a long time to see it. Despite this, don’t exhibit anger. It won’t help you. If you get uptight it could create irreparable damage. Since your goal is ultimately to help them become financially stable, resentments are counter-productive. Instead, ask them if they would like your help formulating a plan for financial independence.
If they do not want your help, ask them what their plan is and when the plan calls for them to be financially on their own – and when they’ll move out. Explain that this isn’t because you don’t want them around. It’s because you know they want to be independent and beyond giving them support now, you want to support that goal as well.
If they don’t have such plan, I suggest you gently tell them that you would like them to come up with a plan within a month. They do owe you that much. Ask again if they would like your help.
After they understand that you mean business, they will likely invite you into their huddle. If they don’t ask for your help and aren’t able to come up with a plan, you might consider asking them to find a new place to live. Tough love could be just what the doctor ordered.
2. The Plan
It’s simple math. Your kids will only be able to stand on their own two feet when their income exceeds their expenses. That means the first step is to figure out what it’s going to cost them to live once they leave the nest. They don’t have to come up with an exact figure – an informed estimate is all they need. Fortunately, it’s easy to gather this information on the net.
Of course they will also need income estimates in order to determine if the plan will work or not. What they should focus on is how quickly they’ll be able to find a job (if they aren’t working now), how much it will pay and how stable that job is. Again, it shouldn’t be that difficult to come up with rough numbers.
3. Turning Points
Once they start putting their plan together, you might see a few opportunities or flaws. For example, let’s say your child got a degree in a field that isn’t very lucrative. If their plan accommodates that muted income, fine. Maybe the idea is to move to a very low-cost state once they find a job and make their numbers work. That’s great.
But if they don’t have a plan that reconciles their income prospects with their cost of living, you’ve got a potential permanent house guest on your hands. That’s not good for you and it’s certainly no good for your child.
This is the point where you come in and point out where their planning is flawed. If it looks dark, you have a responsibility to point that out and offer alternatives. You might even suggest that they go back and study something different – even a trade – that will enable them to have the kind of life they really want.
Going back to school after they graduate is painful for your kid and for you if you’re the one who is going to have pay for it. But having your child stuck in a dead-end career for the rest of their lives is much worse – and much more expensive for both of you.
4. Progress Points
Once your child crafts a strategy that seems to work, you’ll both find it helpful to periodically confirm its working. For example, if the plan calls for your kid to find a job by a certain date and earn a certain amount, it’s important to confirm that they’ve accomplished this.
If not, it’s helpful to determine why not. Are the assumptions too optimistic? Is it time to go back to the 3rd step above and make fundamental changes to the plan? You’ll only know if you meet once in a while to check on the progress.
If you’ve gotten to this point it means your child has a plan that makes sense and the plan is working. That is wonderful. You should be able to easily identify when they’ll move out and become independent based on your projections.
This is something to celebrate if you ask me. Commemorate the fact that your child accomplished something really important by crafting and executing this plan. This exercise has moved them much further down the line when it comes to their independence; it’s also provided great lessons on planning, budgeting and getting things done.
Do you support your college graduate children? Do they have a plan for moving out? What is it? Is it working so far?