If you find yourself helping your grown children with their financial responsibilities, such as rent, groceries or their phone bills, you may be part of a trend. More than half of parents of adult children surveyed in a 2015 Pew Research report had helped their offspring financially in the past year.
Helping your kids can be rewarding—and few parents with available means would let their child sink under an unexpected medical bill or flail in a true financial emergency. Yet regular financial boosts can become an issue if they impair your child’s financial independence, or your future.
Maybe you got into this innocently enough, never meaning to enable your kid: His first job didn’t offer health insurance, so you paid it for him. Then he needed a security deposit for an apartment. Soon you were paying his utilities. And so on. For an adult child, such seemingly small assists might lead to a pattern of financial dependence, says Sarah Swantner, a certified financial planner at Kahler Financial Group in Rapid City, SD, and member of the Financial Therapy Association. For the parent, the financial drain could wreck the monthly budget, or even derail retirement plans. “Unless a parent is really well off financially, they’re probably not able to afford continuing to take care of their adult child, especially as the parent reaches retirement age,” says Swantner.
Worse still, emptying your own coffers to help your adult child with basic expenses may render you unable to help should a true emergency arise, says Kevin Reardon, a CFP and owner and president of Shakespeare Wealth Management in Pewaukee, WI.
Breaking the cycle can be difficult, but ultimately it helps both of you. A 2018 study on financial well-being found that financial self-efficacy—basically, feeling confident that you can pay your own bills—was the single best predictor of financial well-being. So, yes, by cutting your kids off, you’re actually helping them be happier over the long term.
For Lisa Auerbach, a learning and organization specialist in Brooklyn, NY, welcoming her post-college sons back home involved setting financial guidelines. “You can’t worry about hurting your child’s feelings when you have to talk about money,” says Auerbach. She credits clear communication and expectations—she charged both kids rent, as well as their portion of utilities—with making them financially self-reliant today, even as she was giving them a boost back then. “I think the conversations with money need to start really early,” Auerbach says. “Not scaring them about money, but as a reality to life, and what the expectation is when they come home.”
If you’re wary that you’re heading toward a bad financial pattern with your kids, or you’re already in one, here are some ideas on how to change course.
Have a Conversation About Money
Some parents are reluctant to address the situation for fear of alienating their child, says Swantner. “Focusing on the fear of harming the relationship is likely to keep the parent stuck,” she says. “The relationship already has issues, and that’s why this pattern exists.” You’re the (more) grown-up here; if you’re having financial issues with your kid, it’s time to talk about them.
Understand How You Got Here
Recognizing the roots of the problem can help you solve it. “Looking at the dynamics, the underlying emotions that are happening, would be the first step,” Swantner says. The situation is both financial and emotional, which means you’ll need to deal with both parts of the equation, she says.
Get Support
Dealing with both the financial and emotional components might be easier with the professional help of a financial planner, who can assess your immediate situation as well as your long-term goals, as well as a family therapist. In addition, Swantner recommends that adult children learn or relearn basic financial skills, such as budgeting and managing money. “These types of skills might be missing if the dependence has been pretty severe,” she says.
Create a Plan and Communicate It
Swantner recommends creating a firm plan that gradually reduces the child’s financial dependence. You might, for example, stop paying the cell phone bill this month, the grocery bill next month, and then let your child know that in six months, she’s responsible for her own rent. “The parent needs to communicate clearly what’s going to happen with the finances ending,” Swantner says, recommending both sides commit to and acknowledge the plan and timeline.
Besides stabilizing your finances, improving your chances of reaching your long-term goals, and helping your kid be a real adult, getting out of a bad financial pattern with your offspring can pay another dividend: a better relationship for years to come.
Marcia Lerner lives in Brooklyn, NY, and writes about finance, health care, and children's literature. Her articles and reviews have appeared in the New York Times and Proto magazine as well as many financial websites and magazines.
Read how one mom found balance in helping her grown children with their bills.