Beware of digging yourself into a hole with credit card debt, especially when that debt results from helping adult children enjoy a lifestyle they (and you!) really can’t afford. Here’s what credit experts say:
“Older consumers are using credit cards to supplement their income as well as to help adult children with cell-phone bills, car payments and other expenses, says Melinda Opperman, executive vice president at Credit.org.
If that sounds familiar, your first step may be to rein in your financial support of the kids.“
Eleanor Laise, “Tips for Dealing with Debt in Retirement,” Kiplinger, September 2019
The Takeaway: Think twice about covering expenses for your grown kids, especially if your generosity is digging you into a hole. Your job is to train your kids to be financially responsible adults. That means learning to live on a budget, taking responsibility for their own financial decisions, and prioritizing needs and wants.
Of course, it’s OK to extend a helping hand once in a while, but it’s a fine line between helping and enabling. Plus, getting yourself into trouble with your own budget won’t help make your kids more financially secure.
If you tend to be too generous, here’s a good rule to follow. No more “helping out” until your credit card balances are fully paid off, and you’ve tucked away the maximum each month into your retirement savings accounts.