Every parent – particular those who adhered to principles of frugality, delayed gratification and all-around squirreling behaviors – would like to see smart money management skills in their children. These skills might be evident (or not) in the teenage years, but generally become noticeable in their 20s, within a year or two of graduating from college.
But the current economic conditions are throwing off a lot of expectations. First, we know that 85 percent of recent college grads are living at home with their parents. This could be interpreted as frugal behavior. But in reality it’s a matter of poor employment opportunities coupled with high student loan repayment schedules. It’s pretty hard to repay on those loans when you’re working for $20,000 or $30,000 per year.
Second, among those adult children working in their first jobs, savings are just about nil. And because so few of them have credit cards – which are a lot harder to qualify for today than before – having a source of emergency cash to cover insurance deductibles or car repairs is a very real concern.
Do you want them coming to you for cash when they need it? At what point do you definitively cut the cord?
One source of loans for anyone with any form of job is paycheck cash advances . Also known as faxless payday loans, these types of loans have faced much scrutiny in recent years, much of it critical. But as an option, it teaches the borrower a few things:
A sense of independence – Borrowers learn they can manage the situation with their own financial solution. There may be other occasions to do some similar financial two-stepping later life, yes?
Stay true to obligations – When your child is able to cover a medical or car mechanic bill, or simply pay rent or insurance premiums, because they are taking out a paycheck cash advance, they are honoring their commitments.
Learn tradeoffs – If the interest charges on faxless payday loans make them uncomfortable, fine. That is a lesson in how managing (or failing to manage) money comes with a benefit or cost.
After all, money management is complicated. We – and our children – can learn through experience.