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With many young adults struggling in today's economy, many parents are forced with the same question -- "Should we provide financial help?"

Our Money Coach, Bill Stanley, said there are many things we can do to help them.

But it's better to start with what NOT to do:

- Don't just give money to your children. Stanley said they just will consider the money as part of their "income" and go on their merry way.

- Don't co-sign a loan or provide them with a credit card you pay for. This encourages them to continue poor spending habits, he said.

- Don't loan money to your kids. The majority of children think "gift" and they will never pay it back.

Here's what Stanley said we should do:

- Provide financial assistance only if you get something in return -- like a review of their written budget, a memorandum of agreement (which is a legally enforceable document), or signs of visible change in their spending habits.

- If you are financially able, you should consider paying for their health insurance if they are not covered.

- If you want to make a good investment, pay for additional education or job training.

With the real estate market so rough lately, many young adults have moved back home -- some even with family members in tow.
Stanley said it's okay to have your kids move back in with you as long as you establish some rules.

Rent the basement to your child and his family on a temporary basis. "Emphasize temporary," he said, " write it all down."

If your offspring wants to buy a house, consider a shared equity agreement or an equity loan. In a shared equity agreement, one party contributes part of the down payment, and that party would be part owner. When the home is sold, you would receive your contribution plus a percentage of any increase in value.

You can actually loan your child money to increase his/her down payment if you follow IRS rules.

Stanley said the first question you should ask your child when he or she requests help in buying a house is: "How much down payment have you saved?" If the answer is none, you might counter with a plan to match the amount your child can save for a down payment in the next two years. This would be considered a gift.

Bottom line, Stanley said, is that tough love is the way to proceed with a child who needs financial help -- not an open checkbook.

Bill Stanley and Money Matters airs every Tuesday on FOX21 Morning News
If you have a money-related question, feel free to contact Bill directly by e-mail: moneycoachbill@aol.com