Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
I have counseled numerous families on how to manage their finances, and there’s been a common issue among many: how to best help an adult child with his or her financial issues, from struggling to make mortgage payments to managing overwhelming credit card and student loan debt.
Adults face a tough job market today—even with a college education—and often turn to their parents for help. These parents are faced with a tough decision: Do they rescue their child from financial ruin, putting their own financial lives at risk, or do they leave the child to sort out the mess alone?
Consider alternatives to paying off your adult child’s debt
The first thing to consider is whether there is an alternative to helping adult children with their financial issues. Determine the type of debt your child has. If he or she is struggling with mortgage debt, for example, you may only be able to offer moral support—it’s up to your child and his or her lender to come up with a solution. If you want to help, though, you may want to help your child organize the mortgage paperwork and reach out to the lender. Then, your child and the lender can discuss payment options or alternatives, such as a loan modification or a short sale.
Should your adult child ask you for help with his or her student loan debt, do some research before simply taking over the payments. Research programs that may be available to help your child with his or her student loan debt, such as the Public Service Loan Forgiveness (PSLF) program or military programs. You might also consider student loan counseling from a non-profit credit counseling agency that can talk with you and your child about repayment options.
In some situations, adults need help caring for their own children. I have spoken to many grandparents whose grandchildren stay with them full-time because of their children’s financial issues. If you’re a grandparent, one way to help is to offer your grandchild a place to stay after school. This could save your child a tremendous amount of money, as he or she would no longer need to pay for daycare or afterschool programs. This is a big responsibility, but it’s also a way of assisting your adult child without breaking your own bank.
Think twice before paying off your adult child’s credit card debt
If your adult child is struggling with credit card debt, you have to ask yourself if it’s a good idea to help him or her pay off the debt before dipping into your wallet. Is your name associated with the debt in any way? If it is, keep in mind that your credit score could be negatively impacted if your child doesn’t pay the bills. In this case, you may want to take over the payments to ensure they’re paid on time and your own credit doesn’t suffer. You may want to close the account or lower the credit limit so your child does not get overwhelmed with debt in the future.
If the debt is not associated with you, meaning you’re not a co-signer or joint account holder, use caution when paying off the debt. If your child got into debt because of his or her poor money management skills, he or she could wind up in debt again and expect you to foot the bill a second (or third or fourth) time.
Is helping your child financially something that you can do?
No matter what situation your child is facing, the big question you should ask yourself is whether you can afford to help him or her with financial issues. If the answer to this question is no, then you must stay firm and offer a different type of support other than financial. It can be difficult to watch your child struggle at any age, but if you were to become homeless by putting your financial future at risk, would your adult child be able to take you in and pay for your future accommodations?
If helping your child get temporarily caught up on his or her bills would mean risking your home and retirement savings, it may not be a good option. Instead, focus on maintaining your own financial standing so that you’re able to guide your adult child and provide the moral support he or she needs to manage the situation.
Mechel Glass is the vice president of education for ClearPoint Credit Counseling Solutions. She is responsible for developing the curriculum and financial education materials for online classes including webinars, podcasts, videos, and listen-on-demand classes. She provides support and training for the agency’s community outreach programs and staff, including financial education specialists in 15 states. Glass also manages the development and reporting of the agency’s online education, and she is the co-author of The Veteran’s Money Book (Career Press, April 2014).
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.