Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

My House Rules for Boomerang Kids.

August 25, 2016 at 12:00 AM

More adult children are living with family than at any time in the past 60 years. Whether your twenty-something bundle of joy is back home (or never left!) because you’re a better roommate with better digs, or because they have yet to find a career job, you still need to lay down some financial expectations:

  1. They Are To Contribute to Household Expenses. There is to be no freeloading. Yes, they are your kid. But they are also an adult. And adults need to carry their weight. Or at least some of their weight. I recognize you may not need “the help,” but having a child contribute to household cash flow each month is teaching a ton of life lessons. Make this a formal expectation. Ideally, they should set up an automated transfer to your checking account for the same day every month.
     
  2. Have Them Explore Health Insurance Through the ACA. Just because you can keep any adult child on your own health insurance policy until they reach age 26 does not mean you should. Hear me out. If you are responsible for any part of your health insurance premium through work, ask the benefits folks to recalculate your contribution if your adult child(ren) were no longer on the plan. Then have your child shop for a policy through the ACA program. It’s important to realize that a young adult with limited income is likely going to qualify for subsidies. If the ACA option is less expensive, I think it’s worth considering having them make the move. (One caveat: If a child has a chronic condition, check with their existing doctor if they accept the ACA insurance before making the shift. Many ACA plans have “narrow” networks of doctors compared to your workplace plan.)
     
  3. Get Confirmation They are on Pace with Student Loan Repayments. Repayment of federal loans starts within six months of leaving school, regardless of whether your child has a job or not. The only way to delay payment is to formally apply for a deferment or forbearance. Sticking their head in the mud is not an option.
     
  4. Push Retirement Savings for the Employed. If they are eligible for a retirement plan at their job, and it comes with a matching contribution, you are to make it clear they will be kicked to the curb if they don’t participate. The younger they start saving for retirement, the less they will need to save on their own, as compounding will have many more years to work its magic. And if it’s not clear to them, walk through how the match is effectively a bonus. And no child of yours would ever be silly enough to turn down a bonus.

    For children with a job but without an employer retirement plan, make it clear that you expect them to save in a Roth IRA. The contribution limit this year is $5,500. But you can get started with far less, at discount brokerages such as TD Ameritrade. An automatic deposit of $100 a month that grows at an annualized 5% will be worth around $6,800 in five years. Even if they stopped investing more—not suggested!!-the $6,800 will be worth nearly $50,000 in 40 years, when they are in retirement, assuming the same 5% annualized return.

Tag Cloud

Young Adult don't spend mortgage interest tax deductionwomen longer life spanOverspendingHDHP's are not badCredit scoredeath benefit 20 to 25 times annual incomeaccelerate dental workcouple financesbuying car 2016Federal Stafford loanSatisfyingadjust allocations costly insurance mistakemax employee matchstandard rateSwap Older Annuities or Life Insurance Marlo ThomasstaycationStudent Debt Crisisalways use all paid time off15 year mortgage2015 financial roadmaprefundbest loan deal can you afford it3 bucket approachCredit Card Interest Ratehome ownership20 year level term rent vs buyprofessional advisorhome related tax break bonus women live longerone credit cardpeace of mindHigh Credit Scorepay 100% cashFederal Reserve20 to 25 times annual incomeretirement planis it necessary?The Suze Orman Showenjoy saving no waiting periodbe true to yourself8 month emergency fundno tax on withdrawlsCredit Card Rate Increaseborrowing plan do not pay allowance for good behaviorallowanceUniversity of Illinoissummer job match income value money10% donate to charityworkaholiclow credit scorebe good examplelower mortgage interesteight month living expense Lovefour steps to retirement savings bad retirement planningAARP Social security calculatorritual scheduleGiftHDHP balance transfer public service loan forgiveness programpaid vacationreal estate mistakesmake saving a pleasuresave long term goalcredit cardhighest possible benefitoverspend on giftsbetter loan ratesfinancial independencefinancing car valentines dayis it kind?Ashley SpringerWashingtonpay interest while in schoolcommissionsLong Term Care premiumsteach importance of helping othersFinancial Awarenessdebt freeHolidayhealthy teethcar buying mistakesdear suzepermanent life insurance!00% tuition paidjuggle multiple financial goalsSuze Orman's Money Warsloan necessityAlarm Clockgrandchild summer job IRA contributionStudent Debtgift up to 14,000protect dependent don't use allowance as bribelong-term care Financial Solutions For Youmultiple lendersautomate student loan paymentscommunity bankARM Cautionhousing marketreferrals LifestyleFundsHow To Build Creditsidelinedderailed planFICO ScoreFree Debt EliminatorAdequate Auto and Home Insuranceadult childrenstrained relationshipNew York Lifeaffordable premiumengaged in financescredit reportgift not loansame-sex marriageno private loansgraduationOne Wallet At A TimeFinal GoodbyeUniversity of Floridafinancial fearsCOLAmarriage inequality20% down paymentstudentultimate compounding giftverify wellness screening and programsmanage student loansWill30 year mortgage let them have 50% controlprovider of financial supportHSA tax savingsspring summer long term carecredit managementclosing costs 2% of loanaffordabilityinitial tax break burn outconfidentidentity theftpay off debtstudent loan debtMust Have Documentsbest interest ratescompare monthly expensesworst financial mistakedon't ignore open enrollmentBill and Pennytax refund fraudexercise reguarlyGoodbyeget credit cardsmall changes kid borrow firstadd teenemotional stakesdream school6 month waiting periodFICO at least 720raising interest ratesincreased auto insurance premiumtoo expensive schoolForbes Top 10home insurancemonthly dental insurance premiumteensmental healthInfluentialsHoliday SeasonBankruptcyFiscal Responsibilityemployer offered life insurancedeath benefit needs for familyPrime Rate Increaseunder 18 financial giftspeak new goalPost-Divorcetake actioninterest capitalizationco-sign ETF'sprotect your familyearn allowancecompare provider pricingprotect and provide for minor child kids schedule payments3% debt transferred 40% toward financial goalone annual feetelevision hostFederal Funds Ratehome budget after tax costVital Documentssecured cardSandy Hook Elementary School20% down payment avoid feesLong Term Care Insurance closing fees4 Must Have Documents premiumFinancial Power of AttorneyDeath Benefitdon't do five year car loanonly refinance if it paysSuze approvedsave moneyemergency fund savings20% equitystudent loan repayment planhealthy retirement weightpay high rate off firstnear historic lows3 step financial road map2016 adjust withholdingmaintain standard of livingwrite new goalGay Couplesshort term goal don't defer interest paymentsreplace permanent life insurance with termreduce interest ratepurely financial standpointHigh FICO Score = Better Rateno negativityretirementBaby Boomersconsider roth 401(k)anticipated salaryis it necessaryage appropriate chorepreexisting condition not coveredTelepicturestax ID theft2017 TaxesMinor Children Exhibitionage appropriate goalsCommunication Skills insurance yearly reviewnon conventional routeEmergency Savingsearn more on savingsreduce withholdingSpendingSuze is my biggest mentordon't derail retirement savingsFHA loan feesget the most out of social security contribute household expenses depreciating asset savings pleasureswitch to roth 401(k)doctors in networkpay down student loan debtMost Influential Celebrities ListUrbana-ChampaignLTC shoppingGay Rightsstandard deduction prescription tierconfident of solutionadvice for college graduatesPay Off Debt Before Retirementno fee transferTeachStudent Loanallowance taskcommitchildren's bookCollege of Veterinary Medicineorigination feesdebtdoctor no longer in networksocial workdon't blow tax refundretirement accountsRevocable Living Trust3 savings buckets eliminate credit card debtBankfull retirement agejanuary billsMoney Marketfinancial argumentswaive home inspection bidphysical healthCPI-WSelectQuote.comPhyllis Shelton expert long-term carepaid in fullbetter loan dealsAmy Lacyetroth irano apologyCNBCbuy down would you decline a bonusrequired disclosureno retirement funds for down paymentpublic service career student loan repayment home buying budgetgay marriage ban end Florida pay credit debt ASAPemployer funding HSAhigher monthly paymentbudgetno interestmoney vowslife insurance name trust as beneficiarysocial securityinsurance mistakemarriage financial responsibilityapproved medical 100% tax-freeLegal Guardianmortgage brokercar leasinghigh FICO scoreDurable Power of Attorney for Health CareFinancial AdvicePBS SpecialGiftsiffy incomeinsuranceproperty taxhigh down paymentovercome financial fearsno late fee quick closingFinancial Gift CliffMass MutualAuto Savings file taxes quicklyautomatic paymentopen enrollment review savingsInvest for savings growthwomen long term carecalculate dependents annual income needsStock Investmentsoverspend on nights outrefinanceschool US Tax Codedo you need life insurancezero rate transfer dealsshop online guaranteed level term policyterm insuranceMoney-SavingsuccessBeautyFinancial Educatorlousy investmentSandy Hook PromiseCory Bookerplancollege studentSave Us Moneynot enough life insurance740 credit scorehigh premiumsCiti Simplicity Card cut monthly cable billface your financial fearEric Dodge know before you oweGraceAccuQuote.comget over life insurance phobiauniversal college accesscostly legal better termshome loan credit score below 740 buy homeback-to-school budgetbreakdown projected monthly housing costhealthy youpresident Obamamax employer matched 401(k) contribution401(k) ContributionsFinancialfinancial aidno sneaking in feesannual cost of living adjustmentmeet monthly suitablegrandparent IRA contribution comparison shoppingFinancial Awareness Video Festivalnew carWall Streetmobile appMortgage Credit Availability Indexdon't buy wantsgift grandchild IRA contributionunsubsidized Stafford loanFICO credit score credit card mortgagehome buying mistakescreate new truthbuying a carcar loanteens and moneycnbc alarm clockCD'srolloverat worst still pay 75% benefitlong-term care premiumsstudent loan repayment estimatorhome buying seasonraise insurance deductibleStaffords this year have a fixed 6.8% interest rateCombo Insurance Products10 year repayment plan Suze Orman Scholarshipdental savings planincentives for health care wellness screeningnot gender specific emergency fund 2015 record year car salesFinancial SystemJose Rodriguezreduce monthly paymentdangerous retirement plansame sex marriage band end FloridaMotherverify retirement plan with HR or plan sponsorConventional loan PMIPersonal FinanceHDHP's are good for youWarner Bros Television Groupleave a legacyhigher insurance deductibleno splurge School of Social Workholiday spendingfraudulent returnRichis it true? HDHP/HSAdental discount planfinancial goal phrasehigh credit score discountlower interest ratelow down paymentcost of capitalization calculatordebit carddental insurance switch to spouse coverageRevocable TrustRetirement SavingsNewtownincrease emergency savingslower premiumsocial security not going brokeCivil Rightsmoney-aware childitemized deductioncommunity collegestudent loan repaymentlow mileage discountcharges on credit cardstretch out haircut appointmentsRetirement IncomeFixed Rate Mortgagepush yourself to save more for retirementlife insuranceloan no longer than 36monthsLong Term Care shoppingbest interest of investoronly offered while employed loved ones dependent on incomefocus on new truth setup automatic savings withdrawautomatic withdraw to savings healthy retirement blood pressureSelfishbecome member bad decisionsresponsible with moneyget health insurancehealthy gumsfederal student loan deferment shorter payback periodHeartRoth 401(k)percentage men widowed 75-84real estate marketLTCi ASAPloan is giftschedule vacationInfluential Celebritymortgage disclosurerising home pricesMoneyhigh deductible health care planPrime Rate Rise 2015closing disclosurecontribution HDHP'sAmericans don't use all paid vacation timefamily save at least $100 monthlyunexpected expensecut monthly cellular billmax benefit coveredlower rate8 Rulesloan big picture increase retirement savingscredit unionbe kind to yourselfbig results raising mortgage rates secure creditVeterinary Schoolnegotiate points with bank or sellerpositivetraditional vs roth 401(k)2016 adjust estimated taxtaxescredit utilization rate8 month safety netbuy home you can affordwives should be involved in retirementretain separate credit cardsrequire chore in exchange for allowanceFederal PLUS loanyours, mine & oursescrowlearn good financial choicesdon't cover cosmetic dentistryEasy Life Insurance ARMincrease retirement contribution ratefocus on needsback door Roth IRALTC50 over 50letter to suzepay down car loanmortgagebill paying prioritiesNew american Dream raise deductibles401KFinancial CliffEmployer Matched ContributionForbesretirment savingsstay positive15-year refinance deallow-cost index mutual fundprotect loved ones no private loanfinancial concernidentity fraudtitle insurancehealthy aging live below your meansstore credit cardsfile asaplowest cost fund option19 years cash flow problempowerfulavoid burn outkeep a scheduleteach your child good money habitsInflation Benefitpay more than minimumHoliday Shoppingno life insurance financially irresponsiblechildren under 18don't charge a pennyrepay student loansSuze Ormanterm life insurancedon't extend mortgage college graduateAARPborrow each year, capitalization is going to pile up monthly benefit overspend on dining outFRAraise your deductibleheartacheCommencementpaying for collegeignore 6 month grace period point cost offset by savingsSuze changed my lifeChanging Livesalternative FICO scoresocial security never insolventdangerous money seasonpercentage of women widowed 75-84Suze Orman spouse Kathy TravisInterestresponsibleinterest on student loanslower overall drug costthree year car loanfiduciaryForeclosurewomen outlive menspecial saving accountIRA contribution gifted money


View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel