The Color of Money / Time to tell kids to grow up

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As a parent, your job is to help your children develop the skills they need to become good citizens, and this includes being financially responsible.

During a recent online discussion, I answered questions from parents concerned about their adult children's financial lives.

Q: My daughter is having a baby in October and she and her boyfriend only have one car. She is partly living at home.

She has poor money management skills, no college degree and works part time as a waitress. She keeps getting declined for car loans, and has asked us to co-sign for her, which we really do not want to do. My husband's car is paid off. My car is two years old with 66,000 miles on it (75 percent put on by my daughter) with about $8,000 left on the loan.

What advice would you offer about the best way to get her a car, which she is really going to require with the baby?

A: You need to let her grow up. She's not being financially responsible because she doesn't have to be.

Let's recap: 1) She's got poor money management skills. How exactly will that improve with the pressures of a baby that she can't afford? 2) She doesn't have a degree or, I'm assuming, hasn't tried to get any advanced skills that could increase her employment opportunities. 3) She can't get a loan on her own. It could be because she doesn't have a credit history, but it could also signal that she's not responsible with debt.

My advice:

• Under no circumstances should you co-sign for a car loan for her. Co-signing means you are equally responsible. Based on your daughter's history, that car loan will become your car loan and you will feel pressure to pay the loan for her. And how could you not? You will be thinking about helping with your grandchild.

• Under no circumstances should you sell her one of your cars. Think she will pay you back? Probably not. If you give her the car she's been overusing, you would have to pay off the $8,000 debt and then find the money to replace that car. If you can afford to give her a car, do so in the interest of helping with the baby, but not at the risk of going into more debt yourself.

• You and your husband need to sit down with your daughter and the baby's daddy. What are their long-term plans financially? Ask how they plan to care for the baby with the increased financial demands.

Will she and the baby be "partly" living in your home? I wouldn't stand for that. Go or stay but not this in and out. If she's staying, which might be best, at least temporarily, then you have a right to inquire about their finances. You have the right to help put her on a budget or demand rent and contributions to expenses.

• Let that boyfriend man up! He's now responsible for helping make a way for your daughter and their baby. He and your daughter should be figuring out how to get her a car. So while I understand your concern for the baby and your daughter, help usher her into adulthood by not bailing her out.

Q: I have two young adult children who continue to struggle after college with jobs and finances. They are both back home with me. I do not charge them for rent but I do ask that they save so they can move out and into their own place.

Do you think I should be receiving a financial fee for their lodging?

A: I wouldn't charge them rent if they are saving as much as they can to move. Keep asking for proof. For free lodging they should be willing to show you their savings account balances. The moment you see that they aren't saving as they should, kick in some rent and rules! They will save and move soon enough.

legalnews

Write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her email address is singletarym@washpost.com.


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