The US Census Bureau’s latest numbers show that over 35% of millennials in California still live at home. With so many young people never leaving home or returning home, a financial burden is put on their parents. Even for emerging adults (18-29 year olds) not living at home, parents are still financially helping them. Unfortunately, this sometimes results in parents taking on additional debt, delaying their life plans, or even postponing their retirement. Thankfully, there are specific things parents can do to lessen the financial burden. Read on to learn some dos and don’ts to financially support your emerging adult child.
Ask yourself, “Will this money help my child become more self-sufficient?” If the answer is no, you should rethink giving your child the money.
Give money without seeing how it will impact you financially. If paying for your daughter’s one bedroom apartment is putting you in the hole, it might be time to reconsider having her move back home.
Set clear parameters around the money you’re providing. For example, if you pay for your son’s cell phone bill, that means he needs to stay within the data limitations of his cell phone plan.
Give money blindly. Twenty dollars here, twenty dollars there… by the end of the month, you may have given your daughter several hundred dollars for who knows what. Make sure the money you’re providing is going towards your child’s needs, not wants.
Provide firm boundaries if needed. If you see that your son is not using your financial support to help him reach further levels of independence, it’s okay to roll back your financial support until you start seeing some real effort on his part. Financial support should be a privilege, not a given.
Forget to put a concrete financial plan in place. Without a plan, your financial support can becomes the new normal instead of temporary support. Having an end date in place helps everyone have something to work towards.
Get your child some financial coaching. If your daughter will allow you to help her, great! Though, it’s common for emerging adult children to reject their parents’ financial advice. So be prepared to have an independent outsider be the financial coach for your child. Having the coaching before your son moves out or becomes financially independent will increase the likelihood that he’ll have good financial habits and stay financially healthy while on his own.
Are finances a source of tension between you and your emerging adult? Contact Dr. Crystal I. Lee for a free 20 minute consultation to see how she can help.
Please read more about parenting an emerging adult here.