Make Your Kid a Money Genius (Even If You're Not) by Beth Kobliner

Author:Beth Kobliner
Language: eng
Format: epub
Publisher: Simon & Schuster

YOUNG ADULTHOOD

You’ll always want to protect your kid, but now that he’s grown, it’s time to teach him how to do it for himself. Here’s what to say.

• You need to get health insurance. As a parent, you are not responsible for your adult child’s medical bills (even if he is living in a miasma of his own sweaty-sock smell in your basement) unless he still qualifies as a dependent on your taxes. To see if he does, check out “Who Can I Claim as a Dependent?” on IRS.gov. But many parents feel responsible for their kid’s health care, so it’s in your interest to make sure he is covered. Keep in mind that the majority of personal bankruptcies filed each year are due to unpaid medical bills.

For many young adults, the best option is insurance provided by an employer. This option might be a nonstarter for your kid if (1) his job doesn’t offer insurance, (2) the insurance provided is way too expensive, (3) he’s a freelancer or part-timer, or (4) he’s unemployed. Don’t fret—there are other options.

If your kid is under 26, and your insurance allows you to cover dependents, start by looking at the cost of adding him to your policy. In a few states, remember, insurers are required to allow parents to cover their grown kids for even longer; in New Jersey, for example, the age cutoff is 31. To find out the rules in your state, check with the National Conference of State Legislatures (NCSL) at ncsl.org/research/health/dependent-health-coverage-state-implementation.aspx. Chances are, insuring your child through your plan will be less expensive—and it probably offers broader coverage—than what your kid would pay to obtain coverage on his own. As of this writing, Healthcare.gov may offer an affordable plan as well as tax breaks or subsidies if an applicant’s income falls below a certain threshold. No matter which way he gets coverage, you might decide to help him pay for a portion of it if you’re in the position to do so. (For much more on how to choose a health insurance plan, see Chapter 8 of my book Get a Financial Life: Personal Finance in Your Twenties and Thirties.)

• Don’t skip renters insurance. When I returned home the day after I moved into my first solo apartment—a tiny studio in what seemed like a safe building—I discovered that the few pieces of gold jewelry that my grandmother had given me were missing, as were a computer and some cash I’d left on the dresser. I didn’t have renters insurance. Whether your kid’s apartment building has a fire and all of his valuable stuff goes up in smoke or a neighbor cuts himself on your son’s glass coffee table and wants to sue for the medical bills—these are the times when your kid needs renters insurance, also known as tenants insurance. Contrary to what many people assume, the landlord is generally not responsible for theft or most of the damage that could happen in a rental. So if your kid’s possessions

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