When it comes to giving new graduates a word of advice about their finances, parents are sometimes reluctant to speak up. After all, they figure, the kids aren't going to listen anyway.
On the contrary, Mom and Dad. Who else (besides Kiplinger's) are young adults going to ask for guidance about investing in their 401(k) or opening a Roth IRA? In fact, 70 percent of Gen Xers and Millennials still look to their parents for personal-finance advice, reports one study.
Based on my experience with my own two college grads, plus input from other parents, here are other golden rules for grads (and their parents):
• Be judicious in helping your kids look for a job. Give them the name of a good contact, but encourage them to make the phone call or appointment. Young adults are great at trolling the Internet for job opportunities (my daughter responded to dozens of ads during her recent job search), but they're often shy about speaking with someone over the phone or in person still the best way to sell themselves.
• Pay for their health insurance. When kids are dropped from the family policy, either because they graduate or turn a certain age (usually between 21 and 25), it's often easier for them to get insurance than you think, even if they don't have a job.
Parents can extend workplace coverage under COBRA, which allows an adult child to remain on your policy for up to 36 months beyond the cutoff age. Or kids can purchase their own temporary policy or high-deductible plan, which will cost less.
Go ahead and pick up the tab. That will give you peace of mind and protect your pocketbook in case of catastrophe.
• Pass on your family's values. "Young people should get in the habit of sending small contributions to their alma mater and to the charity of their choice," says one father.
When our son started his first job, he surprised us by sending us a check for $100 each month. He wanted to pay off some of the tab he figured he had run up during his year at home, when he was a student with minimal earnings.
• Don't tap retirement assets to help the kids. You need to protect your own financial future. If you eventually feel secure enough to part with the cash, that's another story. "I hope someday to be able to occasionally bestow money on all of my kids without their asking," says one mother.• Have faith in your offspring. My daughter just took a job 3,000 miles from home. When my husband offered to subsidize her apartment so that she could rent more space, she declined. "I'd rather do this on my own," she told us.
Janet Bodnar is deputy editor of Kiplinger's Personal Finance magazine and the author of "Raising Money Smart Kids" (Kaplan, $17.95). Send your questions and comments to [email protected].