Do you financially support adult children?

It is an exciting day, albeit tinged with a bit of sadness, when our children leave home. Maybe they are off to see the world, heading to university or flatting with their mates. Does this mean we stop supporting our adult children financially?

This question can become the elephant in the room for many families.

The short answer seems to be no!  A quick poll among friends and clients, reveal that many parents still provide financial support after they’ve left home.

The agreement we had with our children was we would support them during university and after that they were on their own.  Sounded like a really good plan at the time, but over the years it hasn’t quite worked out that way.  The number of parents in the same boat as us is quite common.

The old adage of children leaving home at 18 or when they finish their tertiary education and then supporting themselves, has disappeared for a high percentage of parents.  Many of are faced with the dilemma of supporting their adult children for longer than originally thought.  This helping hand often leads to a little friction between the parents and a rod for their own backs.

This story was told to me in a humorous way, but there were serious undertones.

“Our son came back from overseas, no money, no job, so of course we welcomed him back home.  Six months later he is still here, he has a job, but isn’t contributing a penny.

I causally suggested that he might like to pay some rent.  His mother shot me down in flames, so I didn’t push it, the agro I got from her just wasn’t worth it.  So, I suggested he might like to move out, go and live with his mates, you know, live the single man’s dream.  Well, that got an even worse reaction from them both.  

So I just shut up and keep paying the bills….. I’ll deduct it off his inheritance later – if there’s anything left that is.”

We love our children and want to do everything we can to help them.  But at what point do you draw the line and (as hard as it can be) say, “No, you have to stand on your own two feet.”

If only it were that simple!  But it isn’t, because anything that involves money isn’t just about the numbers, it is also about emotions.  And in cases like this, there’s a lifetime of emotions floating around very close to the surface!

A couple of years ago friends had two sons graduating from university in the same year.  Both universities were out of town and the deal was the boys had to pay for flights, accommodation and the hire of graduation robes, etc.

Both boys were very bright, one was working full time and had saved most of the money for graduation.  The other was drifting, living in a small town with very little prospect of work, undecided what he wanted to do with his life and no money to pay towards his graduation.

Should they pay for the son that has no money to go to his graduation?

This is what they did.  They lent the balance of the money to the son who has saved as much as he can to get to his graduation.  And as much as it broke their hearts, they didn’t give the other son the money.  “This is one of life’s lessons he needed to learn.”

What would you do in this situation?

Here are a few reasons parents continue to support their adult children,

1. You are genuinely concerned about your children’s financial well-being, you can see they can’t make ends meet.
2. You don’t want your children to struggle financially the way you did.
3. We (often mistakenly) think our children are worse off than we were at their age due to student debt and rising property prices, so we want to give them a helping hand.

There are dangerous side effects of supporting our children for too long,

1. Your children don’t learn how to manage their own finances and assume we are the safety net when they strike a financial trouble.
2. The sacrifices and money you invest in your children may put your own retirement income at threat.
3. How do you differentiate between siblings?   Helping one and not the others may be a recipe for friction within the family.

So, how do you navigate your way around this issue?

The key, as with most issues around money, is communication.  In a family situation, this is easier said than done, so here are a few suggestions that may help.

1. If you don’t feel that you can have the money conversation with your adult children, bring in a financial adviser or third party that can help the conversation stay on track and not get emotive.
2. Be clear about what your expectations are.  For example, your children move back home, so set some guidelines about contribution to the household and time frames.  They may not be able to assist financially, but there are other non-financial ways of contributing.
3. Be prepared for the discussion to get heated with emotional statements like, “You will never see your grandchildren again if you don’t help.”
4. Be clear whether the financial support is a loan or a gift; either way, document it.
5. Don’t feel guilty about saying no.  You have raised your children to adulthood, and it is now time for you to enjoy your life.
6. Understand what is going on in your head.  Are you feeling guilty, or manipulated or are you refusing to let your children grow up?  Take a step back and ask yourself, “If this wasn’t my child, what decision would I make?”
7. You are not alone.  Many parents are facing the same situation that you are, so ask for help.

I would love to hear your stories and how you have resolved to financially support your adult children, so leave your comments below.