PenPenWrites

It's one thing to struggle with your own fiscal problems–retirement looming, nest egg shrinking. But it's even worse to watch your kids fall into debt. What do you do about that?
That's a question raised in a recent Washington Post column, which advises parents of grown children NOT to denude their own assets in an effort to save their children. Certainly, putting ourselves in a position where we are no longer self-supporting is dangerous. But sharing some of our assets with a child who runs into fiscal trouble can be the right thing to do–depending on the situation. As I see it, the help line can be drawn between a child's bad judgment and misjudgment.
Here' are highlights from the column: 

Don't jeopardize your own
finances in order to help your child, particularly if you’re
nearing retirement age and have a fixed number of years to build
up/resuscitate your savings plan. Borrowing from your 401(k) (if
there’s anything left in there) or tapping a home equity line of credit
to help pay off your kid’s debt isn’t a great idea.

Don't be afraid to pass judgment on your
child’s debt. You’ve weighed in on everything from the cleanliness of
their rooms to their Friday night date, so why should debt be any
different? You may decide to treat student loans or health-care costs
as worthy causes while credit card debt from that new flat panel TV is not. The last thing you want to do is enable
them to continue what could be a vicious cycle of spending.

Treat a loan to your adult children as a full-fledged loan, complete
with interest. (If that makes you feel guilty, you could always return
the interest to them after the final payment as a surprise.) As with
any loan, write down the
terms of repayment and decide what the penalties should be for late or
missed payments.