Parent to parent: Toward financial independence

With my son about to graduate, his cell phone has become a small piece of a large puzzle. I put him on our family plan several years ago. Now — even though it will cost him more — should I take him off?

What about other things my husband and I pay for, essentials like auto and health insurance and "frills" like flights home to visit us? Should I tell him he's grown up now and on his own for all these things?

Why do I feel as if I'm ripping Linus' security blanket right out of his hands?

Lora Jo Bossio, director of Financial Aid at UC Davis, tells me that parents exhibit a wide range of behavior when it comes to supporting their children financially. Whether the parents are affluent or not, some view their children as independent at 18, others at 21, others later. Graduation is often a time of demarcation.

College loans

The biggest issue for many is college loans. Even students who received financial support from their parents may have loans in their own names. Graduation starts the clock toward repayment, which normally begins six months later.

The banking industry suggests that no more than 5 percent to 9 percent of an individual's gross income should go to debt service. What if your child doesn't land a good job? Should you keep helping?

What if your son or daughter also graduates with credit card debt?

At UC Davis, information about students' university-funded loans is available online and through an electronic "exit interview," which explains their financial obligations after graduation. In-person interviews are available for students with Perkins and University Loans, or for anyone who requests extra help. Although loan repayment is a challenge, Bossio points out that students who repay responsibly establish good credit.

Bossio encourages students with loans to make contact with their loan servicing agencies. These agencies often turn out to be more understanding about job and salary issues than students expect, and they can assist students as they navigate the world of repayment.

Another concern

I worry about health insurance. There's a cushion, but it's small.

At UC Davis, June graduates who have purchased university health insurance will see it continue automatically through the summer. Students who graduate at other times can buy an extra quarter of coverage at a higher, non-student rate.

But many young people let it slide because they feel invulnerable.

It's terrible that many Americans have to live without health insurance, and I don't want my son to put himself in this situation unnecessarily.

So I harp on health insurance, and my husband and I are willing to help pay for it.

Other than that, I confess that I'm trying to show my son gently out the door. He is lucky to be trained in computer science, an area where jobs are again plentiful, and I expect him to set up housekeeping on his own.

Truth is, I belong to the "You're-grown-up-at-graduation" bunch. Hopefully, I communicated this message long ago, back when I realized he would be able to handle it.

Individual differences

That's the bottom line: Each child is different. Even in the same family, one may be able to assume financial responsibility, and one may not. One may have talents that lead to easy money, others may not. One may need to move back home. Fairness becomes an issue. Do you do exactly for one child as you did for the other?

Families differ, too. What can you afford? What sort of behavior on your part will encourage financial responsibility in your child? We parents know that our children will need our emotional support beyond graduation, and certainly our love, but they may need money, too.

Would first and last month's rent be a good graduation gift? How about that cell phone?

No answers. Lots of questions. If your student is graduating in June, the time to start thinking is now.