May 31, 2026
The moment your child tosses a graduation cap in the air, the panic slowly creeps in: will they be successful? If they need help, how much help is too much? Financial expert Suze Orman has a clear answer for Canadian parents navigating the fine line between supporting a new grad and protecting their own financial future. And her rules hit close to home.
In a 2019 interview on NBC News, Orman answered a question from a caller whose recently-graduated son wanted him to co-sign on a car loan. His son claimed he needed a vehicle to be able to get a job, but didn’t have the income to qualify for a car loan on his own.
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Orman’s advice was blunt: Family member or not, don’t co-sign a loan. She told the caller his son needed to find an alternative way to get around and start earning income first.
In Orman’s blog post about financially supporting children after graduation, she outlined her house rules for helping new grads — a guide any parent or caregiver can use.
“As a parent or grandparent, I want you to be smart about how you help,” she writes.
The 3 rules
Orman’s rules might seem harsh to some, but they’re meant to protect both you and the recent grad in your life.
1. Only help if you can
Or as Orman says: “No stipend unless your finances are in great shape.”
If you have a few hundred dollars a month that you can spare, helping your newly-graduated child isn’t necessarily a problem. But Orman advises only giving support if you carry no credit card debt, have a full emergency fund and are on track with your retirement savings — whether that’s your Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) or both.
That’s a high bar, and for good reason. According to a 2025 RBC poll, nearly half of Canadians (47%) live paycheque to paycheque and couldn’t cover three months of living expenses using savings alone. If you’re in that group, Orman’s message is clear: You’re in no position to financially support someone else — even your own child.
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“Don’t you dare tell me — or yourself — that a few hundred dollars a month isn’t a big deal. It is very much a big deal if you are within 10 or so years of retirement and aren’t truly financially secure,” Orman says.
For Canadian context: The 2026 RRSP contribution limit is 18% of prior-year earned income, to a maximum of $33,810, and the annual TFSA contribution limit for 2026 is $7,000. If you’re not maximizing — or at least actively contributing to — these accounts, your own retirement is the priority.
2. Needs instead of wants
If you’re in a position to help, Orman recommends putting a “need versus want frame on your contribution.”
While your child might insist they need a car to land a job, Orman challenges parents to think through all the alternatives before making a costly contribution — or worse, co-signing a loan.
Co-signing a loan carries serious risks: The Financial Consumer Agency of Canada (FCAC) states you become equally responsible for the debt. So, if your child misses payments, the lender can come after you. It also affects your credit score and your ability to borrow for your own needs.
The median student debt at graduation from a Canadian public post-secondary institution sits at around $17,500, according to the most recent data available from Statistics Canada. Further, many new grads are already carrying financial responsibilities before they’ve earned their first paycheque. Adding a car loan you’ve co-signed to that picture can compound financial risk for both you and your child.
3. If they live with you, they should pay rent
This may be Orman’s harshest rule. After all, isn’t part of the appeal of moving back home after graduation the fact that it’s (supposedly) rent-free?
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“I am fine if you want to let them just plop down for a month or two and catch their breath. But if they continue to live at home beyond that, it’s time for them to contribute,” Orman writes. She advises assigning household chores, asking them to pay rent and encouraging them to take part-time work while they continue to seek full-time employment.
“Don’t cringe that this sounds like punishment. It is anything but,” she adds, noting that structure during the transition between graduation and a first real job can be more helpful than a free ride.
This advice is particularly relevant in Canada, where the number of adult children living with their parents has been rising steadily. Statistics Canada reported that the number of adult children who lived with their parents increased from 31% to 35% between 2001 to 2021. However, the older cohort (those aged 25 to 34) saw a rise from 38% to 46% in the same period — the highest rate recorded since the 1940s. The cost of housing and wage disparity are major drivers, but Orman’s point stands: Indefinite free rent isn’t a kindness if it stunts financial independence.
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What Canadians can do now
Whether you’re a parent thinking about how much to help, or a new grad figuring out how to find some financial footing, here are some grounded next steps:
- Check your own financial foundation first. Before offering money, double-check:
- Do you carry credit card debt?
- Is your emergency fund fully funded (three to six months of expenses)?
- Are you contributing to your RRSP and/or TFSA?
If any of these are shaky, protect your own future first.
- Never cosign without legal advice. If you do decide to co-sign a loan for your child, speak with a financial adviser first. Understand that co-signing makes you jointly liable — you’re not a “backup,” you’re an equal borrower.
- Set a clear timeline for financial support. If your grad is living at home or receiving a monthly stipend, agree up front on how long this arrangement lasts and what milestones trigger its end. Vague arrangements lead to conflict and dependency.
- Help them open a TFSA. If you want to give your grad a meaningful financial gift, consider helping them open and fund a TFSA. Every Canadian 18 or older accumulates $7,000 of TFSA contribution room in 2026. Investment growth inside a TFSA is tax-free — a far better long-term gift than a monthly stipend.
- Charge symbolic rent. Orman’s logic is sound: even $300 to $500 a month in rent — far below market rate — teaches financial accountability and keeps your child building toward independence. Some parents put the rent money into a savings account and return it as a lump sum when your child moves out.
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Em Norton is a Content Specialist at moneywise.com. They have been with the company since 2022. Em has been writing and editing professionally since 2019 and has previously been published by IN Magazine, Xtra Magazine, Money Under 30, Money After Graduation, Our Canada and more.
