More and more frequently, parents are supporting their adult children well into their lives after they’ve left “the nest.” COVID-19 has brought this concept into the spotlight, as many young adults who lost their jobs or who had to relocate during coronavirus, ended up moving home. It’s not a secret that parenthood is expensive! However, many parents are struggling to walk a line between continuing to be supportive of adult children while also setting themselves up for financial success. Let’s walk through how you can successfully set financial expectations with your adult children that strike the balance you’re hoping for.
The saying “put your own oxygen mask on first” absolutely applies to parents who are deciding between supporting their adult children and meeting their savings goals for retirement, paying off debt, or maintaining the lifestyle they desire. An excellent first step to taking care of yourself and your finances is to clearly define your goals for the short and long term. For example, you may be:
Whether or not these goals will impact your ability to financially support your adult children is entirely dependent on your cash flow and your willingness to continue your support.
It may feel like you’re supporting your adult children a lot if you feel financially anxious about your own goals. On the other hand, you may not realize just *how much* you are supporting them if you’re still maintaining a comfortable lifestyle. Take the emotion out of it by doing an audit of your finances. What expenses of theirs do you currently pick up on a recurring basis? Do they live with you? Do you pay certain bills for them? You may also provide one-off support like paying for trips home for the holidays. Write out all the support you’ve given over the last 12 months and assign a monetary value to each line item.
Some adults may look at their goals list in comparison to their income and find that they have plenty leftover to continue living the lifestyle they love and support their kids in a way that’s comfortable for them and their values - and that’s great. However, if you see there’s a gap between achieving your goals and supporting your adult children, it may be time to reign in the financial help you’ve been giving.
Alternatively, you may just have a strong emotional boundary that you’d like to set where you are no longer taking care of your adult children financially. If this is the case, for whatever reason, know that whatever protection you want to put around your money is entirely up to you. There is no right or wrong answer.
It’s also worth noting that only you as a parent can define the line between help or support and enabling your children - even if they’re adults. You get to decide what works for you and your family, and how much support you’re comfortable giving before you feel as though you’re doing your children a disservice. The answer may even vary from child to child depending on their needs and personality types - and that’s also okay.
Once you understand your goals, know what type of help you’ve been providing, and have a clear grasp on the boundaries you’d like to put in place, it’s time to speak with your children. This conversation doesn’t have to be emotional in nature, which is often the fear that parents run into. In fact, if you are clear on the facts (what your goals are, your current financial situation, boundaries you’re putting in place, and support you’ve been providing), you can confidently outline your position with your children.
If you’re making a dramatic transition away from helping your adult children, you may feel better about this change if you help them find financial guidance to achieve independence. Working with a fee-only financial planner to support them through budgeting, investing, and understanding their own cash flow can help them organize a plan and transition away from requiring your support.
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Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.