After college, I moved back in with my mom because I couldn’t afford to live on my own. Fortunately, she didn’t have to cut me off and kick me out because I moved out after a few months once I had enough money coming in to cover rent for an apartment.
I consider myself lucky that my mom was willing to help me in a time of need, but her generosity was by no means uncommon. A Clark University poll of parents found that 44 percent said they provide their 18- to 29-year-olds with frequent support when needed or regular support of living expenses. Another 30 percent said they provide occasional support.
There are several reasons parents offer their adult kids financial assistance, but a common motivation is the belief that their children really need help, according to a 2015 Bank of America/USA Today survey. “Parents will be parents,” said Janet Bodnar, author of “Raising Money Smart Kids” and Kiplinger’s Personal Finance Money Smart Kids columnist. “They will never really turn their kids away.”
But, you don’t want to your adult children to rely on your support indefinitely. “Your kids should expect to be cut off at some point,” said Bodnar said. And they shouldn’t resent you when that time comes. “That’s called growing up,” she said.
Why You Need to Cut Off Your Adult Children
Providing financial support to children through their 20s and 30s could hurt both them and you, said David Bader, a certified financial planner (CFP) and regional director at Merrill Edge. “If children begin to rely on their parents as a continuing source of income, they won’t learn to become financially independent and prepare accordingly for their own life milestones,” he added.
And you can put their own finances at risk if you go into debt or sacrifice retirement savings to help your children. “Parents often put their kids’ needs first, but it’s important to plan, invest and save for their own financial future, specifically their retirement,” said Bader.
Plus, you could be sabotaging more than your financial future by supporting your kids — especially if you’re letting them live at home.
For example, you could be creating emotional stress for yourself or damaging your relationship with your spouse. According to the Clark University survey, 40 percent of parents said they worry more about their kids when they live at home with them because they witness all of their ups and downs. Also, most said they were able to enjoy more time with their spouse when their children moved out.
“You do have to have your own life at some point,” Bodnar said. “And it’s hard to do when your life has been tied up with your kids for decades.”
How to Cut Off Financial Support to Your Kids
The best way to cut off your kids without causing resentment is to agree upon the extent of support you’re willing to provide before you start giving them any assistance, Bodnar said. Ideally, the conversations would begin while your children are in college. Get them thinking about becoming financially independent, and let them know then what sort of help you’re willing to provide once they graduate. If you arm them with the necessary tools and resources to manage their own finances, it will be easier to wean them from your support.
If your kids move back in after college, you need to come up with a plan with a capital “P,” Bodnar said. Decide whether they should pay rent — they should if they have income — whether they’ll help pay for groceries or household bills, what household chores they’ll be responsible for, whether they’ll have a curfew and how long you’ll allow them to live with you. Some parents actually have written contracts with their children, Bodnar said.
“It’s your house,” she said. “You can have rules.” You just need to tell your kids what those rules are upfront so there won’t be any disputes down the road. And after hearing the rules, they might even reconsider moving back home.
If your kids ask for financial support rather than a place to live, ask how they plan to use the money. You shouldn’t provide unlimited resources, but you can help with expenses that are worthwhile to fund and will help with your children’s financial independence, such as health insurance or continuing education, said Bader.
Keep reading: How to Keep Your Deadbeat Kids From Putting You in Debt
How to Support Your Kids Without Giving Them Money
You can help your kids gain financial independence without giving them actual financial support — and keep the bond with them strong in the process.
For starters, offer them advice. More than half of the millennials surveyed for the Bank of America/USA Today report said their parents had the greatest impact on their handling of finances through advice they gave them and money lessons they learned from them. Bader recommends sharing some financial lessons with your kids that you wish you had learned when you were their age.
You can also help your children get a job or jump-start their careers by helping them make contacts. Bodnar said she put her daughter in touch with her former college roommate, who worked in the field her daughter wanted to enter, and helped her get her foot in the door.
Of course, every family’s situation is different. But by letting your children know what your expectations are and creating a plan for their financial independence, you can avoid surprises and conflict.