Parents devote a significant amount of time, effort, and financial resources to supporting their children at every stage of life. However, as children mature into adults, there comes a time when parents must relinquish control and allow their children to stand on their own.
A recent Bankrate survey reveals that, when it comes to deciding whether to cut the financial cord, parents and their adult children don’t always agree.
According to the survey, Gen Z adults think that their parents should continue to help them pay for things like housing, health insurance, car payments, cell phones, credit cards, subscription services, student loans, and travel for a longer period of time than their parents think is appropriate.
For instance, Gen Z adults believe that they should not begin paying rent until they are 23 years old, whereas Boomer and Gen X parents believe that they should begin paying rent when they are 21 years old. Similarly, Gen Z adults believe that they should start paying their credit card and cell phone bills at 21 years old, whereas their parents believe that 19 years old is a better age.
Although the survey doesn’t say how many respondents live with their parents, it is obvious that more young adults are doing so than in the past. According to a July 2022 Pew Research Center research, half of adults between the ages of 18 and 29 lived with at least one parent.
While it is understandable that young adults may require some financial assistance as they transition into independent adulthood, it is also essential for parents to establish boundaries and encourage their children to assume personal responsibility.
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Instill Independence
Providing too much financial support for too long can actually hinder a child’s growth and development, preventing them from developing the necessary skills to navigate the real world.
Of course, every family’s situation is different, and there’s no one-size-fits-all solution when it comes to financial support for adult children. Some parents may choose to provide ongoing support for their children, while others may decide to cut the financial cord earlier.
Ultimately, the most important thing is to have open and honest communication with your adult children and work together to come up with a plan that makes sense for everyone.
It’s natural for parents to want to support their children, no matter the age. However, there comes a point when financial support can have bad consequences for both the parent and the child.
A recent survey conducted by Bankrate found that nearly 70% of parents with children over the age of 18 have made financial sacrifices to help their grown-up kids. While this may seem like a loving and supportive gesture, it’s important for parents to consider the long-term impact of these sacrifices.
According to the survey, parents reported reducing their emergency savings, impairing their ability to pay off their own debt or save for retirement, and making it hard to reach other financial milestones.
Low-income parents were most likely to make financial sacrifices to help their adult children. This can have serious consequences for parents, especially if they fall behind on housing payments or can’t afford medical care.
Financial Capabilities
While it can be difficult to say no to a child who asks for financial assistance, parents should not put their own financial security at risk to help their children. Instead, it’s important to set clear parameters for financial assistance and attach a specific dollar amount or time frame.
This will help both the parent and the child understand the expectations and avoid any misunderstandings or resentment.
Parents should also encourage their children to take responsibility for their own finances and make a plan to become financially independent. This includes setting financial goals, creating a budget, and building an emergency fund. By providing guidance and support, parents can help their children become financially responsible adults.
Teaching children to be responsible with money is an important part of parenting. As children grow older and head to a more independent life, it’s crucial to encourage them to take responsibility for their own finances. By teaching children the value of money and how to manage it effectively, parents can help set their children up for financial success in the future.
Here are some tips for encouraging children to take responsibility for their finances:
Start Early:
It’s never too early to start teaching children about money. Even young children can learn the basics of saving, spending, and giving. Parents can give children an allowance or money for doing chores and encourage them to save some of it in a piggy bank or a savings account.
Lead by Example:
Children learn by watching their parents. By modeling good financial habits, parents can help children understand the importance of saving, budgeting, and avoiding debt. Parents should be open and honest about their own financial situation and involve children in family discussions about money.
Set Financial Goals:
Help children set financial goals and encourage them to work towards them. This can include saving for a big purchase, contributing to a college fund, or donating to a charity. By setting goals, children will learn the value of delayed gratification and the satisfaction of achieving something they worked hard for.
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Teach Budgeting:
Teach children how to create a budget and stick to it. This includes tracking expenses, setting spending limits, and prioritizing needs over wants. Parents can also encourage children to compare prices and look for deals to get the most for their money.
Encourage Entrepreneurship:
Encourage children to start their own businesses or earn money through creative endeavors. This can include starting a lemonade stand, selling handmade crafts, or providing services like dog-walking or lawn care. By fostering an entrepreneurial spirit, children will learn the value of hard work and the rewards of earning money.
Encouraging children to take responsibility for their finances is an important part of parenting. By teaching children about money, setting financial goals, and modeling good financial habits, parents can help set their children up for financial success in the future. With the right guidance and support, children can learn the value of money and how to manage it effectively, setting them up for a lifetime of financial well-being.
