Banks do have to take at least part of the blame. Every week, high school and college students find multiple offers for credit cards in their mailboxes. Thinking they would use the card “just this once,” some of these kids rack up several thousand dollars in bills in no time. Now they’re paying the minimum balance every month, with no end in sight. “I don’t even remember what I spent all that money on anymore,” one young woman told me. “I did buy a new iPod but the rest went to clothes and eating out and maybe some of my textbooks. I really can’t tell you what I bought.” Is she responsible for her debt? Absolutely. But it’s also the fault of banks that are willing to issue a card to someone who has no job, no recent lottery win, and no willing co-signer.

Short- and Long-Term Solutions

Short-term, it’s never too late to provide training. When adult children return home, it’s reasonable for parents to insist that they are transparent about how they are using their money and that they contribute to the household. When it is clear that money management is an underdeveloped skill, it’s also reasonable to require them to learn. If tensions run too high with parents as teachers, then enroll them in an adult education program that teaches financial skills or make sure they obtain, and pay for, a tutor.

Plan for their departure the day they arrive. Returning home should be seen as an emergency response to a dire situation, not a comfortable way to avoid assuming the responsibilities of adult life. A preset moveout date and regular interim check-ins will help all involved stay focused on the goal of financial independence. For some specific ideas, see “When the Nest Doesn’t Empty”.

Make sure that adult kids understand the implications of parental support past college. Every year they are on the family payroll, less money is going into their parents’ retirement fund. Are they willing to contract that they will help provide for their retired parents – even if it means a lower standard of living for themselves someday? The issue needs to be talked about honestly.

Long-term, those of us who have younger kids must do a better job of teaching money management skills. As with anything else, the younger we start, the more “natural” something feels. Weekly allowances with guidance for spending and saving can start as young as three. Our kids need to be in on at least some conversations about how family resources are saved, spent, and invested.

To be the kind of financial role models our kids need, we must take full responsibility for our own financial habits and health. Plastic needs to give way to cash. Saving up before purchasing has to replace purchasing and paying later. Our kids need to see us putting off things we may really want until we can afford them.

As finances become more and more complicated, we parents may be less and less able to prepare our kids for what they will be managing in the future. We need to make financial literacy a priority in our schools with age-appropriate lessons in money management starting early and continuing up through high school. Some states have taken the lead and are now requiring highschoolers to take courses in financial skills.

Moving In As a Way To Move on

If your young adult wants to move home for awhile, it’s more helpful to everyone if it is understood that moving in is a privilege, not a right. It should be seen as a time to work extra hard to pay off debts, to establish good financial habits, and to save enough to become independent. It is not unreasonable for a young person to work at two jobs, to wear last year’s sneakers, or to regularly show their parents their savings account balance if that is what it takes. Moving in is only useful if it is a boost toward moving on.