Every parent knows that looking after your children doesn’t stop as soon as they turn 18. Even when they grow up and move out of your home, you still need to be there for them and support them.
One important way that many parents support their kids is with money. Managing money can be tough for young adults, particularly if they need to save a large amount for a deposit or a specific payment to help them fulfil their dreams.
In some cases, parents provide their children with financial support well into their 30s and beyond, so you need to be prepared to help your kids for many years to come.
Whether your children need a one-off payment to help them to buy a new home, or longer-term financial support to help them to study and earn the skills they need to achieve their dream job, supporting your adult kids can be expensive.
Thankfully, there are many innovative ways that you can make supporting your adult kids easier and allow you to live comfortably and help them.
Release Equity From Your Home
If you want to take some of the money out of your home, but don’t want to sell it or move, then you can by using an equity release. This is the collective term for a selection of financial products that can allow you to release funds from your property, either in a lump sum or as a steady income stream that will come in over a set period of time. Futurewise specialises in equity release solutions that can help you to release equity from your property, meaning you can stay in your home and get some money to help your children pay for their dreams.
Get A Loan In Your Name
Many young adults struggle to get loans from regulated providers as they don’t have a strong credit rating or a lot of assets. In some extreme cases, they might be driven towards unsafe lenders, such as loan sharks. Instead of allowing your child to do this, which could be incredibly dangerous for them, you should think about taking out a loan on their behalf. You should only do this if you’re certain that your child is able and willing to pay back the loan, or you’re willing to do so for them.
Taking Your Pension In A Lump Sum
Should you find that you’re in a comfortable financial position, or you have time to earn extra income before you retire, then you could consider taking some, or all, of your pension as a lump sum. Taking your pension as a lump sum can give you many benefits, most notably that you’ll have the money to support your adult child. However, you will miss out on that money when you actually retire in the future and any interest that it could have earned over the intervening time. As such, you should only consider this approach if you trust that your child will be able to pay you back in a few years or you are comfortable enough financially.