What If You Can’t Help Your Kids Avoid Debt?Jul 31, 2018
Your finances are tight and your son or daughter is struggling with post-secondary expenses and student debt. What do you do? There’s no easy answer, yet many parents opt to help pay down their kid’s debt at the expense of their own retirement and debt goals.
As part of this podcast episode, Beth Ann Bone, a Senior Administrator in our Oshawa office, offers advice for parents who simply can’t (or shouldn’t) offer financial assistance.
Honesty is the best policy
First off, focusing on your own financial needs isn’t selfish and it doesn’t mean you can’t help your child in other ways. Many Canadian parents approaching retirement are unprepared, and those helping their adult kids with financial support are delaying those goals even further.
Here are some alternate ways to support your son or daughter:
- Keep an open dialogue. Be honest with your child about your financial situation so they get a clear picture. More than likely, they wouldn’t want you to endanger your financial well-being on their behalf.
- Provide assistance in other ways. Help your child research grants, scholarships and bursaries. This will ease the financial burden while they’re in school and decrease the amount of student debt load they’ll carry after graduation.
- Offer a place to stay. Is your child is attending school close to home? Allowing them to stay home can dramatically offset their expenses. Set clear expectations beforehand so everyone is on the same page.
- Offer emotional assistance. Leaving home for the first time can be a tough transition. Added to the stress of completing assignments and living with new people, your child may still need your emotional support regularly. Offer a listening ear and stay connected as much as possible while they navigate this new territory.
- Share your financial wisdom. To offset student debt, encourage your child to take on a part-time job. Offer as many financial literacy tips as you can so they can form healthy money habits early on. Check out the FCAC Financial Toolkit or take a look at this blog post.