Tip: Talk money with returning grads

June is known for its legion of college grads parading onstage to pick up their diplomas. But more and more, the parade is leading to a long stop at your house. With a sluggish economy and a difficult job market, many young adults are seeking financial help from their parents. What should a parent do in this situation?

"This is one of the times you'd better have a real adult conversation with your child," says Ted Beck, president of the National Endowment for Financial Education. Denver-based NEFE (nefe.org) provides financial information, tools and calculators aimed at helping consumers make informed choices about money, investing and retirement.

According to a poll commissioned by NEFE, 59 percent of parents said they have provided some kind of financial support to their adult children. About 50 percent of the parents surveyed have provided housing, and 48 percent said they have provided living expenses. The online poll, conducted by Harris Interactive last month, surveyed adults ages 18-39 and parents who have children in that age bracket.

Beck says that parents and children should hammer out the terms of the help before it begins. "If it's a gift, call it a gift. If it's a loan, make sure you agree on that," he says. And whatever the terms, make it clear this is not an arrangement that can go on forever. "If your child is expecting open-ended support, you have to sit down and talk about what's realistic," he says.

While helping a struggling child is laudable, there were some worrisome results in the survey. Of the parents providing support, 26 percent said they had taken on additional debt, and 7 percent said they had delayed retirement. "I found it very disturbing that 26 percent of parents providing support have incurred debt," Beck says, warning this generosity could jeopardize a parent's financial future.

As for the children who moved back home, Beck says neither kids nor parents should consider this a failure. "For many families, it's perfectly acceptable to live at home, and to do so for extended time," he says. "It actually might be good."

Beck says use the close quarters to talk about dollars. "Work up a budget on whatever their income is," he says. "Then, they can get some money saved so they can eventually get out on their own."