Every generation of parents has hoped that their children would have an easier life that they, themselves, had. The fact is that the economy has affected all consumers with high unemployment rates, inflated prices and high credit card debt. More and more adult children are turning to parents for financial aid through this difficult time. It comes as no surprise that a recent survey conducted in November 2009 by GfK Roper Public Affairs & Media shows that two out of five respondents have helped their adult children with debt problems.
1004 participants taking part in the survey were asked if they had ever paid off a debt for an adult child and, if so, what kind of debts they had paid off. The following shows the most commonly paid off debts.
- Auto loans (40 percent).
- Medical debt (37 percent).
- Utilities (31 percent).
- Credit cards (30 percent).
- Student loans (29 percent).
- Mortgage (11 percent)
In considering whether to help bail out adult children, financial experts recommend that the parents ask themselves following questions
1. Can I afford to help?
2. Is there a non-financial way that I could help instead?
3. Is the debt that I am paying off one that will have benefits over the long term?
4. Is my son or daughter doing his or her part – cutting out extras in his or own budget or trying to find a job or a better job?
As for all financial decisions, weighing the pros and cons is important. Finding out as much as you can and setting the terms will provide a smoother, if not perfect, solution.
