Are your kids too old to live at home?

June 9, 2009 "There isn't anything necessarily bad about twenty-somethings living with their parents," says Chicago psychologist and author, Kenneth Kaye, PhD, whose latest book is Trust Me: Helping Our Young Adults Financially. It happens frequently, and is only a problem if the ground rules are not clear to everyone, the psychologist adds.

Dr. Kaye says parents must work out a deal that is genuinely in the young adult's interest as well as their own. "Make sure it's a Win/Win," he says.

Dr. Kaye has some pointers on what will help and what won't help:

  • • It will help if your "Deal" includes some reasonable sharing of costs and other responsibilities
  • • It won't help if the money your child saves by living with you feeds a drug or alcohol habit
  • • It will help if your house rules add structure to your child's life along with the shelter.
  • • It won't help if having a place to live merely prolongs your child's adolescence.
  • • It will help if you treat your child as an adult sharing your home.
  • • It won't help if you or your child characterize his moving back home as a failure on his part.
  • • It will help to encourage your child to sleep in a different bedroom, if possible, rather than re-inhabit his or her childhood room
  • • It won't help if it's a good Deal for the kid but bad for you.

"Your own resources may be limited." Dr. Kaye says. "Even if you're financially set for life, you need to protect your turf, your privacy and relationships with your peers. "

There's no reason to let your home become a night club for under-thirties, a warehouse, or a youth hostel, he adds.

"You're doing the right thing if your son or daughter lives with you as a responsible adult, contributing whatever is reasonable to the household, whether that means part of their income or merely sharing the work and consideration," Dr. Kaye says. "It's a different story if your hospitality enables your children to avoid growing up. If it pulls you back to the relationship you had as their caretaker-provider-housekeeper-nagger, you need to stop doing that, for both your sakes."

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About Kenneth Kaye

Ken Kaye earned his A.B. (1966) and Ph.D. (1970) degrees from Harvard University. He was a Knox Fellow at the University of Cambridge, England. Later he trained in family therapy at the Family Institute of Chicago.

Dr. Kaye has published dozens of articles and books for professional advisors as well as family business members about resolving the disputes, rifts, and intergenerational tensions that threaten to hobble their enterprises. The book most descriptive of how his firm operates is Workplace Wars and How to End Them: Turning Personal Conflicts into Productive Teamwork (AMACOM Books, 1994). As a researcher, Dr. Kaye authored The Mental and Social Life of Babies: How Parents Create Persons (University of Chicago Press, 1982; subsequently republished in five languages) and more than three dozen articles in scholarly journals. For parents, he has published Family Rules: Raising Responsible Children (without slapping, yelling or nagging) (Walker and Company, 1984; paperback edition, St. Martin's press, 1990), as well as articles for Psychology Today, Redbook, The Sciences, Family Business, Corporate Board, Nation's Business, and many other magazines.

He is also the author of The Dynamics of Family Business (2005).

A former faculty member at Northwestern University's Institute of Psychiatry, Dr. Kaye participates regularly in the Dispute Resolution group at the university's Kellogg School of Management. He has served on numerous editorial boards and advisory boards, including the Board of Overseers of the Institute of Psychology at Illinois Institute of Technology, the Board of the One-to-One Learning Center, and the Editorial Board of Family Business Review.

Dr. Kaye is a North American leader in the field of family business dynamics, having established his consulting specialty in 1986. He received the Family Firm Institute's Contribution to the Field award, helped organize several of its programs and founded the annual conference of leading psychologists who specialize in family business problems. Ken is also a long-time Advisor Member and Consultant to Family Office Exchange (FOX).

An instrument-rated commercial pilot, Dr. Kaye's work reflects diverse experiences including acting, sailing, mountain climbing, and an MFA from Bennington College in Writing and Literature. He has four adult children and two small grandsons.


By Kenneth Kaye, Ph.D. with Nick Kaye

Does your young adult child suffer from "Attention Money Disorder"? Do you find yourself continually bailing your children out of debt? Does your son or daughter have unrealistic goals about his or her future? Has your child failed to earn your trust when it comes to how he or she handles his or her finances? Are you confused about how much financial help and support you should give your adult children?

If you've answered yes to any of these questions, you are not alone. Millions of parents face these dilemmas, years after they thought their children would be independent. Trust Me: Helping Our Young Adults Financially by parenting expert and family business psychologist Kenneth Kaye shows parents how to navigate through the murky issues they face as they try to offer their children financial assistance while, at the same time, helping them become independent.

In Trust Me, Kaye and his son, Nick, use the experience of Nick's struggle with what they call "Attention Money Disorder" to create a no-nonsense strategy that offers an abundance of practical advice and financial wisdom, all illustrated by concrete examples.

You can spot Attention Money Disorder if your son or daughter has:

  • • Asked you for a loan to pay down their maxed-out credit cards
  • • Accrued so much debt that you are reluctant to co-sign a lease with them
  • • Lost a job and is unable to afford health insurance
  • • Become accustomed to spending large amounts of money on trips, clothes, cars and
  • other items so that they cannot afford to move out of your home
  • • Asked you if they can move back home so they can get out of debt

Dr. Kaye shows parents step-by-step how to negotiate a "Deal" with their young adults, rebuilding mutual trust and inculcating the skills and habits of a self-supporting grown-up. You will learn what to include in your Deal; what you will and won't subsidize; what financial behavior your children will be accountable for; defining conditions and limits in your Deal; and treating the Deal as you would any legal contract. When you make a decision to bail them out of a tight spot, it's totally appropriate to place conditions on doing so, says the psychologist.

Trust Me also explains what to do if your son or daughter doesn't follow through on the Deal. You will learn how to make sure your Deal is clear, written, and enforceable; how to be prepared to enforce consequences if he or she doesn't keep his or her part of the bargain; how to set conditions, criteria and goals to ensure that your child is able to handle paying his own bills; and to make sure your Deal clearly states what your child's responsibilities must be in order to earn your financial support.

Trust Me covers a wide array of topics, including:

  • Debt Seduction: How to inoculate your children against the economy's attempts to seduce them into incurring more debt than they can reasonably manage
  • • Money's Not the Answer: Motivation, education, and emotional support are the solution to the financial difficulties of young adults.
  • • Banking 101: Budgets: Learn why they don't always work. Discover which budgeting habits do work and why.
  • • Banking 201: Credit and Borrowing: The truth about credit and borrowing, the dangers of credit cards, and the value of jointly monitored checking accounts
  • • Risk management: What every young adult needs to know about insurance:
  • homeowner's, renter's, car, life, and, above all, health insurance.
  • • Moving Back Home: What to do when your son or daughter wants to move back in with you.

"Parenthood is a paradox," says Dr. Kaye. "Raising children is about protecting them while letting them go."

As a parent, before cutting the financial umbilical cord, you need to simplify tasks and teach them money skills one step at a time, so the details of earning, banking, paying bills, keeping records and forecasting won't seem so overwhelming, the psychologist adds. The problem becomes how you do that when they've grown up (supposedly) and moved out?

"Today's young adults suffer from an endemic disease that has afflicted many of us throughout the past several generations," the author says. "The roots of financial irresponsibility are ignorance, naiveté, and carelessness. For our young adults to become financially responsible and independent, we have to take the first step and earn their trust by being reliable motivators, teachers and supporters."

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