42% of parents have paid a child's debt
Before bailing out offspring, ask yourself whether you're really helping.
A new poll by CreditCards.com found that 42% of people with adult children have paid a debt for their children at some point. But should they?
The debts most commonly paid off were auto loans (40%) and medical debt (37%). But the survey also found that parents had paid utility debt (31%), credit cards (30%), student loans (29%) and mortgages (11%).
"It used to be that kids would be embarrassed to ask for help. Not anymore," Michael McAuliffe, president of Family Credit Management, a Chicago nonprofit credit counseling agency, told CreditCards.com’s Connie Prater.
The current generation of parents has always provided more help to their children than their parents’ generation did, helping with everything from homework to science projects to college essays and beyond.
This trend, coupled with changes in the economy, has found many parents continuing to help their children financially long past college. The staggering rates of college loan debt, plus job losses, have increased the financial struggle for both parents and adult children.
But should parents be paying their children’s debts? In the CreditCards.com article, McAuliffe offers several questions for parents to ask themselves when weighing whether to help out an adult child.
- Can you afford it? If you don’t have a sound retirement plan in place, you probably can’t afford to help your children significantly. "If you don't have your retirement on track, then to me, that's the end of the discussion," McAuliffe says.
- Has your child cut expenses and made sacrifices before coming to you for help? If your child is still going out for expensive meals, buying all the latest electronic gadgets and otherwise being financially irresponsible, does he really need your help?
- Can you help your child in another way rather than with money? Perhaps you can baby-sit while she works, let him move in with you, provide job-hunting help or otherwise help your child get his financial house in order.
Under what circumstances would you pay your children’s debts? Or ask your parents for help? Is young people’s failure to launch a fault of the economy or of parental expectations, or a little bit of both?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Saving just a single month of expenses may take longer than you think. See how your savings rate affects how quickly you can build a solid emergency fund.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'