5 steps for cutting off your adult kids
Here's how to wean them financially while continuing to give them love and support.
This post comes from Marilyn Lewis at partner site Money Talks News.
It's small comfort but, if you're helping support grown kids, you're in good company. Nearly 60% of American parents were financially supporting adult children, the National Foundation for Financial Education and Forbes reported in 2011. That included help with housing, insurance costs, spending money, living expenses, transportation and medical bills.
More than half of the baby boomers responding to a 2012 survey (.pdf file) told Ameriprise Financial that they'd let their adult children live with them rent-free. Many boomerang kids are overstaying their welcome.
How do you cut them off and launch them into independent lifestyles?
Younger workers wobbling
The recession may be mostly behind us but young American workers still are struggling to stand on their own feet financially.
The recession dealt them a tough blow but it's not the only reason that 20-somethings, 30-somethings and even 40-somethings are wobbling on takeoff, says "Failure to Launch: Structural Shift and the New Lost Generation" (.pdf file), a report by the Georgetown University Center on Education and the Workforce.
Younger adults' difficulty finding steady work and accumulating savings is also the result of longer-term economic trends. More jobs today require advanced skills. Fewer high-paying factory jobs are available for workers who have only a high school diploma, The Wall Street Journal writes.
Student loan debt is holding back younger workers, too. Between 1984 and 2009 the net worth of households headed by someone 35 or younger fell by 68% -- from $11,500 to $3,700, says the Georgetown University report.
If you're the parent of one of these late-bloomers, you know the trends firsthand. You may have taken on debt or delayed your retirement to help your kids.
Your questions are likely to be practical ones:
- Does supporting grown kids really help them?
- How do you wean them from the bank of mom and dad?
It's important to consider whether your support is really good for the kids. By helping them financially you may be subtly signaling that you don’t trust them to be capable of caring for themselves.
Also, helping your kids may endanger your own financial stability. Interviewed by email, Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, says:
This is of course an additional financial burden on the parents, and one they had not likely planned for. What was intended to be a temporary situation often turns into a permanent one, potentially burdening the finances and the relationship.
Here are five steps to help break your financial ties with your kids:
1. Set boundaries gently but firmly
When you do decide to cut off financial support from your adult children, cut the cord gradually.
Begin with a conversation. Tell the kids how much you love them. Tell them that you believe in them, and mean it. Of course they have failed sometimes. Most of us need to try and try and try again until we figure out how to get it right.
Pointing out their failures undermines their confidence. Their confidence is likely to be shaky enough already right now, even if they appear to be full of bravado. Try to focus on the times when they got it right, on ways they've proven their capacity to succeed.
Tell them that you'll be there for them as you gradually shift more and more of the weight for their financial responsibilities to them. Ask them to help identify nonfinancial ways you can be supportive and then commit to the ones you can, in the place of money.
2. Make a plan to end help, with dates
This is a big change and it could be tough on all of you. Tell the kids what they can and can't expect from you. Make a road map for this journey, with milestones -- goals and the dates for achieving them.
If possible, include your kids in setting these goals and in discussing how to reach them. Involving them respects and supports their independence. It also may give you important information about what’s realistic for them to achieve and when.
Of course not all kids will be able to respect their parents' need to pull back. Some won't be able to participate in this planning with you.
One way of defusing the difficulties may be to get help from someone who's neutral, a nonprofit financial counselor. NFCC counseling is free or low-cost. Counselors can act as "an independent third party, helping to peacefully and reasonably facilitate the transition to independence," Cunningham says.
Find an NFCC counseling agency near you here.
3. Help them create a budget
"You have to teach them the basics of finance," Kimberly Foss, founder of Empyrion Wealth Management in Roseville, Calif., tells U.S. News & World Report.
One practical way to do this is to create a budget together. Try not to make it overly complicated.
You might use one of the free online budgeting sites. Or maybe the kids will go for a simple spreadsheet like Excel.
Foss advises clients to budget 50% of their income for needs, 30% for wants and put 20% in savings.
4. Pull back gradually
Foss suggests that parents take 12 to 24 months to get their children on their own two feet financially, starting by removing support for smaller expenses first. For example, you could tell them that for the first six months, you'll pay for their cellphone plan, but after that, it's up to them.
She advises easing them into the real world by continuing to help with student loans longest -- for about 18 months -- while they get used to assuming other responsibilities and get some success under their belts.
5. Lead by example
You may have kept family finances private from your kids in the past. Many Americans do. But some increased transparency can help the kids watch how you do it. Be sure you pay bills on time, work on your credit score and save whenever possible.
They'll be watching your spending closely during this period. Make sure you model the frugality and careful habits that you want to see in them.
Have you had to cut off financial support for your adult kids? Tell us what worked and what didn't.
More on Money Talks News:
For people over 50 it was considered a total embarrassment to be living at home, except for summers if you were in college, a year after graduating from high school. Amazing that young people today have no shame, no self-respect and no will to work. Yeah I heard about the lack of jobs, but the simple fact is that if you have to work 80 hours a week at 2 low level jobs to make it, it should be better than pretending you're an adult while you sponge off your parents and destroy their lives and ability to retire.
"For example, you could tell them that for the first six months, you'll pay for their cellphone plan, but after that, it's up to them."
If their 16 or older and not paying for their own cell phone bill by then, you've already screwed up.
I have a brother who just turned 51 (in June) and he had been depending on my mom ALL HIS LIFE! He is the OLDEST of 4 kids and the ONLY ONE that can't seem to get his S*IT together and it makes me so angry at times! My mom is 74 now and she still gives him $$ (just did yesterday). He won't give up the Marijuana so he can't get a REAL JOB because of DRUG TESTING. He works and will work, but lives by the seat of his pants-paycheck to paycheck. He has never lived off "the system", but still he could do so much better if he would apply himself!
My sister allows him to LIVE in her HOME she bought before she got married and he PAYS RENT (Whenever). She is STILL PAYING A MORTGAGE PMT EVERY SINGLE MONTH!! (STUPID) My husband and I have tried to tell my mom & my sister to STOP enabling him-he has GOT to learn to live on his own w/o help! My mom is not going to live forever and I wonder what is going to happen to him when she dies? Will my sister be stupid enough to pick up the slack? (Probably-until her husband cracks that whip on her)
Worse yet, my mom's estate....how is that going to pan out? She lives in a nice Lake front property and is 100% debt free!!! Will she leave this to him? (PROBABLY) but he won't be able to pay the taxes and I'm sure most of whatever investments (LIKE $50k OR MORE) she has/cash in her checking account (which is usually around $12-15K) will go to his sorry ****! JUST MAKES ME WANNA PUKE!
I think it's a HUGE mistake NOT to teach your kids to be on their own by the time they are 21. I have NEVER in my 47 years asked her to help me and I wouldn't dare knowing what my brother has done to her.
SUPER PISSED OFF YMCA GIRL IN ALABAMA.
New world huh? I went to college and got a job and bought a home. Guess those days are over.
Excellent Wall Street Journal article published in February 2012. Describes how American parents coddle their children and states that American parents "expect too little" and American children "expect too much." When a child is raised to think he doesn't answer to anyone he'll grow up into a spoiled, self-entitled narcissist.
6 steps to prevent your young kids from growing up into lazy, narcissistic, sponging young adults:
1. Enroll your kids in religious schools, or home school them if you have the financial means. Public and non-religious private schools coddle children, discourage critical thinking, teach them everything they say and do is just splendid, and are afraid to punish kids when they make mistakes or behave badly.
2. Don't tell your kid that he's "special" or "exceptional" and that everything he says and does is just splendid. Don't be afraid to tell your kids when they screw up. Point out what they did wrong, and ask them to think about and tell you what they could have done differently to avoid the mistake. If the mistake was stupid, lazy or careless, make that fact very clear. Make sure your kids understand that they're equal to other kids and subservient to adults, not superior to everyone else, and make sure they understand that although they're good people, they do make stupid mistakes and behave badly every now and then.
3. Don't be afraid to say NO. Don't buy your kids things they don't need just because they "want" them. Make them spend part or all of their allowance or money earned from odd jobs on the material things they want. If they play the "But all my friends have it!" card, cut them down and make it very clear that it's unacceptable and if it happens again they will be grounded.
4. Limit TV time for older kids, and don't let younger kids watch TV until they're 8-10 years old. Commercials are dangerous to young kids - they disempower parents and manipulate kids who aren't developed enough to properly analyse the content of the ad. Kids younger than 10 aren't cognitively developed enough to think critically, recognise when they're being lied to and understand that sometimes people have ulterior motives (e.g. companies whose products are advertised on TV care more about getting your money than whether their products are healthy or safe).
5. Make them earn their keep - a small weekly allowance of, say, under $10 until the kid is around 12, and between 12-16 they can earn money by doing chores around the house or around the neighbourhood, and after 16 they need to get a part time job. Don't buy your kid a cell phone or a car unless they can pay for part of it themselves.
6. Make it unequivocally clear to your kids that the parents are in charge of their lives, and what they say is the law, and is ABSOLUTELY NOT up for negotiation. Be a benevolent dictator. Don't tolerate backtalk. You're the boss, and the kids need to remember that at all times.
My parents helped me start a savings account when I was 5 where I would put birthday $, holiday $, babysitting $, and side job $. At age 14, I started taking AP/IB classes, at 16 I was in over my head with multiple extracurriculars, college-level courses, and a part time job. In college, I took over the max credits, took on multiple leadership positions (one as an RA), and skipped studying abroad in order to graduate early to save money. Despite working all these jobs and multiple years overtime, I still struggled to pay for school and felt hopeless many times..and still do. Luckily my parents chipped in for some of my college tuition, but a year out of college I have a stacked resume and many useful skills and still find it hard to come out on top after bills every month.
No, I have not moved back in with my parents, but from someone who is a workaholic (due to the economic circumstances) and an overachiever...at 23 I am still terrified that if the smallest thing happens with my health..or some unforeseen problem, I will have to turn to my parents.
Treating this generation like the past ones is ridiculous. We're shoved into working overtime, told to go to schools we can't afford, then on to grad school....etc, we're in debt before we're even considered legal adults. I don't blame anyone for relying on their parents or living at home. In other cultures and countries, it's normal to ask family for help. In America.."pull yourself up by your bootstraps.." how do you buy bootstraps if you owe hundreds of thousands of dollars to the "education" system.
How in the world are 20 somethings in college expected to do it without help? My son is 21 and has 5 more semester of college before he graduates with his degree.. His dad and I help cover his tuition (after scholarships and student loans), as well as his cell phone bill, medical insurance, as well as car insurance and maintenance. He works 20 hours a week for gas and run money.
So for at least the next 2 years, we are out roughly 13,000.00 per year to get him to a place where he can be financially independent. If we don't help out now, there is no way he will be able to afford rent, utilities, student loans and other loans, gas, food, insurance and all the other stuff it takes just to live. And before anyone thinks he is living a life of luxury, he isn't. He drives a 12 year old car, lives in the dorm with a room mate, and eats the food plan at school.
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