In my last post, I took the position that it is getting harder and harder for some young adults to successfully “launch”; that is, to move out of their parents’ house and become independent. I state that there are two main areas where parents have gotten off track. One is regarding helping their children plan financially, and the other is in helping / requiring their children to gradually assume real responsibility, beginning long before their teen years. In this article, we’ll look at the financial piece.
Helping teens plan financially for young adulthood is very important, and here we see the “chickens coming home to roost” of the last decade of borrowing for everything. Along with adults using credit excessively to live on, borrowing too much money from their houses, and failing to scrimp a little more today to save for tomorrow, we have also seen a trend of telling our children “you can go to college where ever you want; just take out loans”. I think this attitude is a real mistake, with consequences that last for many years.
I cannot tell you how many young and not so young adults I have seen who are burdened by college debt of tens of thousands of dollars. And often, the level of debt is far beyond the potential earning power of their chosen career. An important truth is that for many careers, the earning of a degree is more important than where the degree is from. Even if that is important, one can graduate from a “better” school after transferring their in the 3rd or sometimes even the 4th year, and end up with the same diploma. In California at least, we (at least so far) still have our marvelous community college program, where one can attend classes for two years, complete all the general education requirements, and then transfer. I’m not sure if this program is still in place with all our recent budget cuts, but up until recently if a student earned a B average in a community college, they were guaranteed admission to a University of California campus (not necessarily one of their choice, but some UC campus). This is a very cost effective option.
Another, when possible, is to attend school at a local 4 year university close to home. Again, I don’t know how it works in other states, but in California, tuition runs about $700 per year at a community college, $8,000 at California State University, and $9,000 at a University of California. Books are going to about the same amount at each, perhaps $1,500 per year at this writing. By comparision, tuition at a private university might be $25,000 per year, and room and board anywhere is currently about $12,000. So future debt can be greatly reduced or eliminated if doing so is a priority, and I think that this should be a serious consideration. (Our local paper had a recent column on this topic, worth taking a look at for its links to other reference sites.)
Another way that young adults overburden themselves is with car payments and credit card debt. Is it any wonder that it seems impossible to move out of your parents house, if you are making $400 car payments and owe $5,000 – $10000 dollars on credit cards? Teaching your children from a young age to avoid debt completely until they are already in a “real” job and on their own is so important. It really is a question of helping them buck common trends, and recognize the real cost of borrowed money over time. There are many websites that can help them figure out the true cost of an Ipod that is charged on a credit card and paid for over the course of a year. Learning the difference between saving for a used first (or second or third) car, rather than financing a new car, is very instructive. If you help your children understand and avoid debt, you give them a real gift.
All of the above is not going to happen unless you are willing to help your children develop financial and other types of responsibility. So many of us may have grown up with little, and want our kids to “have what we didn’t have”. Or, our kids grow up in neighborhoods where parents are too busy working a high-level career to take the time to help kids plan, earn and save; they find it easier to just buy for their children, especially if that’s what all the other families are doing.
It is this trend especially that can “seal the fate” of young adult living at home. What I see in my practice and around me is children who live at home with their parents, work (generally part-time, but sometimes full-time). They may or may not be going to school, but typically aren’t taking a full-load (which if you think about is one that would allow graduation in 4 years, and therefore means 5 classes each semester.) In any event, their parents in an effort to be supportive are not charging them rent or asking them to cover much in the way of expenses. The net result is that the young adult has no responsibility at home, and much more disposable income than their parents. Is it any surprise that the young adult develops “champagne tastes”, buys far too many “toys”, and ends up unable to fathom living on their own, paying adult-style bills?
My suggestion is that early in the teen years, if not before, assuming that their children are college-bound, that parents start voicing their expectations that once out of high school, their children will either attend school full-time, working a little to pay for entertainment, or work full-time, preparing to move out in a defined period of time, say 3 months. To leave your kids in in-between limbo is to make it really tough for them in the long run. Obviously, if 5 classes is truly too much, then that expectation can be reduced. But I believe that either school should take up most of their time and energy, or they should be preparing to move out and learn about the world. A similar model can apply for non-college technical training, and for young adults who have been out in the world and are ready to return home and get educated, if that’s an option.
So what is “the moral of the story”? Kids don’t need to “have it all”; they need our time and attention, and a sense of a plan. They need direction and limits, along with our love and nurturing. They need us to have reasonable expectations and an extra helping of confidence in them. And most of all, they need us to do what is best for them, and not just what feels good for us.