Be Firm About the Terms
close-up of man's hand holding cash bills

If you lend money to your children, even if it's a small amount, make sure they know your expectations for repayment.

©iStockphoto.com/Stuart Miles

Chances are, a time will come when your adult child will ask you for a loan. If you simply can't swing it, be honest about it. If you do decide to shell out, here are some guidelines:

  • Be transparent. If you have other kids, they're going to find out about the loan. So be up-front about it and maybe head off some jealousy.
  • Be firm. Interest is up to you, but make sure you have a set repayment schedule.
  • Be optimistic. A 2011 study found that parental monetary assistance actually helps adult children become more independent.