Giving a hand to your adult children might look minor, like covering their phone bills, or much larger, like contributing to a house down payment. As children transition into adulthood, many parents want to support their kids emotionally and financially. This makes it difficult to wean your adult children off of your bank account.
If you’re financially helping your kids into adulthood, you’re not alone. A 2018 Pew Research Center study found that 34% of adults between 23–29 say that they have received financial support from their parents in the past year.1
Continued parental financial support not only risks putting your retirement in jeopardy, it may hinder a young adult’s ability to become fully self-sufficient. So how can you bring an end to financially supporting your adult children? Ease the process with the four suggestions below.
Be Transparent in Your Communication
When first letting your children know that you will no longer pay their phone bill, help out with groceries, or give them a hefty Christmas check, make sure to explain why. Remind them that this is not about your lack of care or love for them, but rather it is for their long-term benefit and ability to provide for themselves long after you’re gone.
Let them know that it may affect your ability to retire comfortably and to cover potential health costs in the future. By appealing to their compassion and treating them as fellow adults, you empower your children to take action.
Give Your Children an Adequate Timeline
If your kids are used to a monthly check, support with their bills, or even one-off amounts of money when in need, it can be a shock to cut off the financial supply immediately. Giving your children time to organize their finances and emotionally prepare to support themselves entirely is one way to lead them towards successful financial independence.
In addition, giving them a specific timeline creates an objective boundary that might be hard to set otherwise. If you wait until you think your kids can handle it (or until you feel prepared), the time may never come. It’s actually easier if you choose a date and stick to it.
Provide the Tools to Succeed
Educating your adult children on best practices for managing their money can increase their confidence while giving them the means to budget, spend, and save properly. You can advise them yourself or point them towards a financial planner. Speaking with either your own advisor or another professional can give them insights into the importance of careful spending and saving for retirement. A financial planner can also help your kids organize their finances and give them a head-start on becoming financially literate.
In fact, we have, at times, had our clients introduce their children to us and blame us for cutting off financial support. “I would love to keep paying your car insurance, but Britta and Ken can be real sticklers, and they insist we need to cut that expense or else we’ll have to come and live with you in 30 years.” Having an outside perspective can dial down the emotion, making it easier to take that next step.
Prepare to Still Feel Responsible
As you stop financially supporting your kids, you may still feel pangs of desire to help them out. The first step towards dealing with these feelings is to expect that they may come up but prepare yourself to stay the course. Even if your adult child struggles trying to figure out how to afford certain expenses, it is ultimately this difficulty that can lead to growth on their end. When faced with financial realities, it will likely motivate your children to prepare, save, and budget more diligently.
Putting an end to financially supporting your adult children isn’t easy, especially during financial hardships. With 54% of young adult college graduates having borrowed for their education, it can be emotionally complicated not to offer assistance if your kids are struggling.2 But by easing your adult children into independence and preparing them with the tools to manage their money effectively, you can smoothly move towards a healthier financial state for both you and your kids.
Helping your child financially may feel good in the short term, but remember, the best gift you can give your children is for them not to need to have the conversation about “who gets mom when she runs out of money.”