When to Stop Helping Your Kids Financially?
Posted by Cap in Personal Finance on April 8, 2006 |Another good question from a reader (from my pool of 18 readers):
When should you stop helping your kids financially? or conversely, “At what age should an adult stop asking for financial help from their parents?”
That’s a tough one. On one hand, you love them and care for their well being, and on the other hand, your retirement funds are dwindling. In clearer cut situation such as their college funding versus your retirement funding, the obvious choice should be your retirement fund—since students can get student loans, and retirees don’t have that luxury.
My dad helped my sister with the down payment for her condominium, and I’m certain many others out there receive financial help from their parents for their mortgage. In my case, I’m planning to get the mortgage without the financial help. That’s one of my goals, and I believe it’s attainable.
By the time I’ll be contemplating a house, my parents will be past their retirement age. If I can’t afford the mortgage, I’ll continue to rent and save up. Yes, it won’t be easy, but I’m going to do it—regardless if I’ll have to rent for the rest of my life.
There are situations where the parents have enough set aside to help their kids, but at what point should you stop? You certainly wouldn’t want them to rely on you forever, but it’s understandable that people sometime face harsh circumstances.
For me, once I’ve moved out (within a year or two), I don’t plan to include financial help from my parents within my budget. I don’t care how bad it gets, I prefer getting into debt myself than getting them into debt. Of course, the whole point of this blog, all those planning and budgeting—is to avoid that situation all together.
There’s definitely a point where you should stop helping your kids, or you should stop asking your parents for help. But I honestly have no clue when that line should be drawn. Hmm.
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April 8th, 2006 at 8:11 am
This is a great post. I think the issue goes far beyond what you can “afford” and what your kid “needs.” I think at the heart of it, this question is about how do you make your kids self-sufficient adults.
Both my wife and I know people who, in their mid-30s, are still living on their parent’s dime. The degree of subsidy differs: a free place to stay, periodic cash gifts to help make ends meet.
But in all instances, the result is an adult “child” who hasn’t yet developed the capability to care for himself/herself and his/her family. Unfortunately, I suspect that where a person hasn’t developed financial self-reliance by their 30s, they never will.
So my default answer to your excellent question would be that parents should, from the very beginning, try to prepare their children for financial independence. This means giving them the tools they need to make a living–education, a stable home, work ethic, etc.
But I’m opposed to guaranteeing certain outcomes. If, despite access to education, good parental role models, etc., your child makes decisions that result in financial hardship (e.g., becoming an actor), part of raising children means letting your children become adults responsible for their own lives.
April 8th, 2006 at 8:30 am
When to stop providing financial help to your kids . . . how about when they turn 21 and become legal in every state? Adult means they are now fully responsible for themselves. Help them become that way by treating them as a grown-up, ie., no “loans” without written terms which later, magically, seem to become gifts.
April 8th, 2006 at 9:57 am
It can be such a dilemna. I have a 20 year old stepson, who is planning on moving out in the next 3 months, but who has his whole paycheck spent by the end of the weekend. He has no concept of money and having to make it last. We make him help a bit towards the rent, so as a way of making him try and get in the habit of learning this stuff has to be paid. But I envision that he is going to learn life’s lessons the hard way, such as if you blow your whole paycheck by the end of the weekend, and don’t pay your electric bill, they WILL shut it off.
April 8th, 2006 at 2:47 pm
Hmmmmmmmmm….a thought! MAYBE I sould make him pay our electric bill too! As an important “Life Lesson”. Make it cost so much to live with us that getting his own place would be a relief to him.
April 9th, 2006 at 4:17 am
I wouldn’t say 21. I’d say once the kid has graduated college and is in the working world. All mine still live at home because they’re all still in school–my oldest is 23. They buy a lot of their own food and they pay their own car insurance. I don’t mind putting a roof over their heads–they’ll be leaving the nest soon enough. I want them concentrating on their education and not stewing over money. They all work (except the 15 year old) and contribute to the house.
On Dr. Phil recently there was this guy who was 31 who was still living at home. See, he threw out the part of the Bible that says a man leaves his parents and cleaves to his wife (I’m sure I didn’t quote that right). Okay, he didn’t have a wife unto which he could cleave…so he felt that meant his parents were still obligated to care for him. My kids would be embarassed to do something like that!
April 9th, 2006 at 10:27 am
I think it depends entirely on what kind of “help” you’re talking about. It’s so specific to each situation. I have a friend who is almost 30. She’s a single mom, and she and her two kids live with her parents. On the surface, you could say that she needs to get her act together.
BUT, her father is disabled. Her mother works full time and has chronic fatigue. So my friend takes care of the house and cooks and does laundry for everyone. She uses her small child support checks to pay for clothes and medical care for herself and her kids, and I think she chips in for food. Her parents provide free housing and much of her food. In this case, it’s a very healthy symbiotic relationship. Are her parents “helping” her? Yes, they’re helping a lot. But she helps them back.
Just pointing out that it’s not necessarily a bad thing to “help” adult children financially, as long as it’s not hurting anyone.
April 9th, 2006 at 11:55 am
Soemone should point out to the 31 year old above mentioned “Baby Boy” that the Bible also says “If a man does not work, he should not eat”.
Shoot, probably about 20 years ago my sister went out with a man who was in his 50’s who still lived with his parents and had never lived away from home. Needless to say that relationship didn’t work out.
April 9th, 2006 at 12:49 pm
A “starter” house costs a half million these days, while a dumpy fixer-uper will set you back about a quarter million. I guess one could always buy a 1 room condo for 300K.
If you’re just starting out, make an average income, and are paying back student loans for the next decade or two, what hope do you have of being able to afford a decent place to live? Given this reality, I don’t think it is unreasonable or irresponsible to live at home with your parents for a while and save like mad, or if they have the ability, to accept financial help from your parents.
If you happen to live in a place where you can buy a beautiful new house for 150K, this may not apply.
April 9th, 2006 at 1:42 pm
Great discussion. I’m close to retirement age & have borrowed money from my parents in the past. (did pay it all back, had written agreement, etc)
Now, I’m contemplating moving in with my mom, as she is mid 80’s at this point, and her house & yard are too big for her to care for on her own. I’m pulled between my place & hers & can’t do a good job either place.
On the flip side, I have a 24 year old son, that I’ve pledged no more money to for the last couple years. He hasn’t got it yet, as he keeps begging for help. Hard to watch him floundering around.
Anyone else pondering their parents estates as retirement funding?? I know my moms estate is coming my direction, we have met with the attorney several times lately. It seems so maudlin to even think about it, but it is a reality. I would rather have both my parents, but that is a little unrealistic too.
I’m really going to be caught as executrix of the estate; I know the money is not going to the grandsons, or my sister………ICK. I will probably leave the country, rather than deal with them all begging for money.
April 9th, 2006 at 2:14 pm
“Half a million” for a starter house???? My gosh where do you all live that houses are priced so high?????
My total debt right now is $200.00, and we are looking at a “Starter Home”, 3 bd, 1 bath, older victorian home for $45,900. Cute as a button! And I’m torn between wanting to take the plunge and try and get it, or staying debt free. If I had to go to sleep every night knowing I had a $500,000 mortage hanging over my head (after 30 years paying what for it like $1,500,000?) I’d never be able to sleep at night!
April 9th, 2006 at 2:38 pm
actually skye, in my area there are plenty of starter houses at half a million.. in fact, I don’t even know if they’re good starter houses. but that’s all relative to the area you’re in.
anyway haven’t got a chance to throw in some opinion too, but I think everyone made lots of good point, specifically — just because you’re receiving help, doesn’t mean its a bad thing. In many cases, the smartest and best thing to do is to stay at home and save , save, save — till you can reasonably start off on your own; and I think that’s fine as long as it’s not causing certain hardship & your goals are clear.
What’s not fine is the many examples mentioned, where the “adult child” (can’t think of another word too), stay @ home and mooch or mope around the house.
I think Miserly made a great point, that it all boils down to how you can best raise your kids to be self-sufficient. The problem is, I know many peers w/ great parents, but other influences in life or just own personality, made them an “adult child.”
I guess a simple gauge could be what was mentioned, when they graduate from college and enter the working world… course, if only life is that simple.
To be honest I could have definitely became an “adult child” a few years back, thinking back about it gives me the chill. I’m glad I caught myself before I became a real burden to my parents, and I’m being careful not to revert back to the old ways.
Much like Mom2fur’s children, I pay all my own expenses, car insurance, tuition, etc. and I’m saving an incredible amount by staying at home while finishing up school.
Doesn’t keep my mom from worrying about me though!
April 10th, 2006 at 9:59 am
Personally, I think the answer is simple. Refuse any request that is beyond reason then sit back while you adult child badmouths you to anyone who will listen.
May 1st, 2006 at 7:44 pm
I agree with Miserly Bastard and Cap that it is about how your raise your kids to view money and spending it. My parents taught me that you get your allowance for the week and it had better last you all week. Of course, I babysat on the side, I took an afterschool job against their wishes and they incentivized high academics by paying me for good grades on my report card. It’s possible to teach a kid not to be a brat about money. It’s really a question to ask yourself about when are you going to feel ok cutting them off if they haven’t learned their lesson. I watch parents in the supermarket get suckered all the time by their kids. It’s awful stuff. The parents, they have no spine!
November 16th, 2006 at 7:33 pm
I’d suggest you continue to pay for their healthcare until they get a full-time job with benefits, but I wouldn’t recommend outright cash support. My mom’s poor and my dad’s remarried so dad & stepmom are doing fine. I realized a couple years ago that they can either help me live above my means now…or put aside for their retirement and long-term care insurance so I’m not run broke by caring for 3 aging parents in 20 years when I’m married with kids about to go to college.
Dad & stepmom did donate some furniture when I moved into my own place. “We’re so proud” she said. Then the truth - “and so grateful you haven’t moved back home like our friends’ kids have.”
December 5th, 2008 at 8:55 am
Our only educationally gifted only child chose to self-destruct with drugs in high school and barely graduated. Caring for a dying mother, I quit work. We made do with less. My son was on and off in jobs, finally decided to be a chef. Starting working and did well. With our support attended a loco ju-co, decided that didn’t have enough “fire power” approached us about attending one of the country’s elite cooking schools. Said he understood we needed to save for retirement. Couldn’t get a loan unless we co-signed. We knew that would be a mess for us to clean up. He offered to pay half. We agreed. Now he says we “Owed him” an education and refuses to pay us back. He called me a lying ass when I refused to give him more money. We are estranged to say the least. Calls us selfish, that is when he calls us. Now is trying to use the birth of his child to extort more from us. We refuse although it breaks our hearts. We’ve been down this road too many times. We have chosen a path few would take. While I’m not religious, I do believe that without true contrition there can be no true forgiviness. My son truly believes he is the victim here. We move on together my husband and I knowing that while we have lost much we no longer have the histerics, the yelling, the lying and the manipulation that is our son. Time does not always make things better. Sometimes it simply reveals the truth.