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Saying no is tough but necessary

Posted August 06, 2014 in Advice Column, Urbandale

A recent report ranked Urbandale as one of the top five Iowa cities to raise a family. Parenting is one of the toughest jobs anyone will ever do, and it doesn’t stop when the kids are grown. Parents of adult children often face challenges, particularly when it comes to finances.

Worthy investments vs. bailout
There are a number of life circumstances in which helping your grown children financially can do your child lasting good, i.e. a down payment on a house or an education. However, when it comes to a “bailout” after your child makes bad life decisions, you should think twice before you come running with the checkbook.

Keep in mind
There are three important things to remember before you loan or give your grown child financial assistance.
• Do not jeopardize your own financial health.
• Do not finance self-destructive behavior.
• Establish clear conditions for the assistance and cut them off if these aren’t met.

If you are able to give your child money, and you know he or she is trying to do the right thing, you can view it as giving your child a leg up in life. However, not following certain guidelines can lead to financial disaster and/or ruin your parent/child relationship. Beyond just financial stress, loaning or giving your child money to support situations you disapprove of can cause strife. It’s essential to ensure any funds you provide are helping your child move in the right direction.

Set guidelines and stay firm
Establish ground rules, expectations, conditions and even time limits for loans. Set realistic behavioral stipulations for support that you know your child is able and willing to meet, such as working full time, actively seeking work, going to school with passing grades, kicking a destructive habit or some other attainable self-bettering goal. Once you set the conditions and expectations for your financial support, enforce them.

Make direct payments
If you feel your child would waste an outright gift or loan, find an alternative way to help. This can include making direct payments to a creditor or college on your child’s behalf.

Registered Representative, Securities offered through Cambridge Investment Research, Inc. a Broker/ Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Mokosak Advisory Group are not affiliated.

Information from, provided by Frank Mokosak, 2900 100th St., Suite 102, Urbandale, 515-223-5404.

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