A recent Harris Interactive poll found that 40% of parents of adult children were still paying for their digital services such as cellphone data plans and streaming entertainment. Two years ago, another survey by Harris found that 60% of parents were providing financial support to their adult children – housing, transportation, living expenses, insurance, medical – even after they had completed college. Are you one of these?
If you’re a parent continuing to support your adult children, it may be because of the relative lack of employment opportunities available to them today. Or it may be a way of staying connected as they move on. While you may see this situation as temporary, here are some steps you can take with kids at any age to encourage their financial independence:
Communicate with your children about money. Don’t be afraid to talk about it. You can begin with the basics, if necessary, and continue as they become more aware of personal and household finances. By the time they’ve reached their 20’s and 30’s, your kids should have a firm foundation about the realities of expenses.
Develop expectations with consequences. Set the ground rules and definitions up front. Is your contribution a gift or a loan? Do you expect your adult child to do anything to help the household in return? Establish the consequences if your child does not fulfill the expectations you set together.
Help them create a budget for themselves. When children learn how to recognize the difference between their ‘wants’ and ‘needs,’ they can begin to prioritize the expenses they may incur. Encourage them to save for what they want rather than buying on credit.
Set boundaries with limits. When you set a time line with clear expectations for your child’s movements toward financial independence, it helps reduce tensions and also serves as a motivator for your young adult.
Continue to monitor your child’s progress toward his financial goals. Remember that your ultimate goal is to raise a child who can leave your nest and take care of herself. And you’ll need to be responsible to yourself and your own financial situation so that you won’t need help with expenses in the future.
Let’s help each other out here – share what’s worked for you and your family. Use the Leave a Reply section below to join the conversation.