Recently, I wrote about how widows can often be targeted as an open wallet for other people — unscrupulous con-artists, well-meaning advisors and sales people, and even family members. Today, let’s look closer at that last category and in particular adult children who continually come to mom for financial support.
I understand the emotional aspects that go along with helping out your children regardless of age (I am the father of three adult sons). As a parent, you want to help your kids and give them a better life. Widowhood adds another layer to these emotional dynamics.
You may feel that helping them will compensate for their loss of the other parent. Also, in the midst of grief, it’s not unusual to place less value on your own needs. Feeling this way may make you think, “I might as well just give the money away. I don’t care. I don’t need it.” You may feel that as the sole parent with the entire financial responsibility now on your shoulders, helping your kids out as much as you can is the right thing to do. These are all understandable feelings.
There are going to be instances, where it can be a good idea to help out your adult children. Paying for moving expenses to a different part of the country to take a new job after graduation can make sense. Investing or loaning cash for seed capital to launch a child’s promising new business may also be a good idea.
There’s also logic behind giving your children money now, while you’re alive, rather than wait to leave the money as an inheritance. You benefit from seeing them put the money to good use, a rewarding experience. You may also reduce probate fees if you gift your children money now, as opposed to through your estate.
But what I want to talk about are the cases where adult children are patently relying on funding from you, now a widowed single parent, rather than taking responsibility for forging their own financial independence.
Statistics show that many parents are frequently assisting their adult children with money. A recent Money magazine survey showed that about 30% of parents in America spend at least $5000/year helping adult children. That number jumps closer to 70% for amounts $1000 and up. I imagine the numbers are similar in other countries.
Assistance comes directly and indirectly. Common direct forms are cash payments for weddings, down payments on a home, purchasing a vehicle, and simply handing over cash whenever asked. Indirect aid comes from things like keeping your adult child on your personal phone plan, or allowing them to live at home for free (sometimes even with a partner), when they are gainfully employed and could (should?) be living on their own.
There are two issues at stake here: your child’s development into a “financial grownup”, and your own financial security. Deciding to wean your kids off of your money will have a positive impact on both elements and you can do it without wrecking your relationship with your child.
When to Stop Helping
How do you know when to stop helping your kids financially? In generations past, it was often delineated by age; once you were an adult, you were on your own. Certain life milestones were also used as markers for cutting off the purse strings; graduating from college, getting a full-time job, or getting married.
Today, age and milestones seem to be ignored as parents have increasingly given their children greater support, often to their own personal financial detriment. If you’re wondering about whether or not you should pull in the reins on your kids, here are several signposts to guide you:
When you’re deferring your goals (retirement, your own holidays) to help them achieve theirs
When they’re employed and could manage their affairs perfectly well if they were responsible with their money
When the “emergencies” you bail them out of are avoidable, predictable, or can be reasonably prepared for
When your kids are coming for help more often than ever (you’re enabling them)
When helping your kids is putting your own financial stability at risk
That last point is the bottom line. You may be afraid to cut off your kids financially, but if you’re going into debt to help them, giving them money you can’t afford to give, it’s time to wean them off your wallet.
Steps to Take
The first step to take is to reframe how you’re looking at their need for financial help. Recall when your kids were young the instances where you removed yourself from a situation, knowing full well that your absence could result in them getting hurt. Remember taking the training wheels off their bike, sending them to camp or a sleepover, or allowing them to participate in physical sports? If they’re adults now, they obviously survived those times when you weren’t there to help them, even if they got a scrape, bruise, or hurt feelings along the way.
Weaning them off financial support is the same. They may have problems at first, but they will survive and eventually get things working on their own. Acknowledging this to yourself, is the first step.
Quantify all the ways you’re helping your kids. They may not comprehend to what extent you’re helping them. Make a list of the direct cash payments you’ve been giving them, and also put a price on indirect aid like letting them live with you, including them on your phone plan, etc. Having the cold hard numbers on hand when you discuss this with your child, will give them evidence of how much it’s costing you.
Set an end date or a time frame to phase out your help. You don’t have to cut them off cold turkey. It may be beneficial for both of you to wean them off, say over 3 – 6 months, to allow them to get their act together and gain confidence in managing their own affairs. But be sure to set a clear end date so that the process doesn’t go on indefinitely. Using a specific date (their next birthday, the end of the calendar year) or a milestone (getting a job, or after a certain number of months at a new job) can be useful in picking a time frame that works for both of you.
Next it’s time to have the discussion. Set a date and time to have your kid(s) over for coffee. Identify that you’ve been happy to help them out. But also identify that you’ve been looking at the amount of help you’ve been providing and show them the numbers you’ve added up. Tell them that you now realize that you need to reduce the help in order to stay on track with your own financial security. Encourage them that you know they are capable of becoming financially independent. Tell them you’re concerned that continued help may actually be stalling this aspect of adulthood. Then discuss your proposal to wean them off of assistance. If it helps to write out what you want to say, do so and practice it. If you want to run it by one of your friends first, do that too.
Identify that you’re willing to offer support in other ways. Obviously emotional support is important to your children. You should consider other ways too. If your child clearly lacks money management skills, resourcefulness, or has vices that are creating money problems, offer to connect them with people that can help.
Find an online course on basic money management. Offering to pay for the course may be money well spent on your part. Have them meet the financial professionals in your life — your banker, investment advisor, or financial planner. If you’ve been using a “financial buddy” to help you as a widow, perhaps your buddy would be willing to speak to your kids about becoming financially independent. And if your children have serious vices affecting their money, help them find professional help in that regard.
Taking these steps, will make it easier to cut your adult children from your continued support. Be prepared for set backs or outright failures on their part. But be careful not to be too readily available as a backstop if an “emergency” comes up. You could end up bringing the child back into being propped up by you when everything in their life becomes classified as an emergency. Remember, your kids may screw up. But they will also survive.
In my next post, I’ll be talking about the times where it does make sense to loan your adult children money, and how to do it in a way that works for everyone, including the kids that aren’t borrowing money.
