It is an exciting day, albeit tinged with a bit of sadness, when our children leave home. Maybe they are off to see the world, heading to university or flatting with their mates. Does this mean we stop supporting our adult children financially?
This question can become the elephant in the room for many families.
The short answer seems to be no! A quick poll among friends and clients, reveal that many parents still provide financial support after they've left home.
The agreement we had with our children was we would support them during university and after that they were on their own. Sounded like a really good plan at the time, but over the years it hasn't quite worked out that way. The number of parents in the same boat as us is quite common.
The old adage of children leaving home at 18 or when they finish their tertiary education and then supporting themselves, has disappeared for a high percentage of parents. Many of are faced with the dilemma of supporting their adult children for longer than originally thought. This helping hand often leads to a little friction between the parents and a rod for their own backs.
This story was told to me in a humorous way, but there were serious undertones.
“Our son came back from overseas, no money, no job, so of course we welcomed him back home. Six months later he is still here, he has a job, but isn't contributing a penny.
I causally suggested that he might like to pay some rent. His mother shot me down in flames, so I didn’t push it, the agro I got from her just wasn't worth it. So, I suggested he might like to move out, go and live with his mates, you know, live the single man’s dream. Well, that got an even worse reaction from them both.
So I just shut up and keep paying the bills..... I’ll deduct it off his inheritance later - if there’s anything left that is.”
We love our children and want to do everything we can to help them. But at what point do you draw the line and (as hard as it can be) say, “No, you have to stand on your own two feet.”
If only it were that simple! But it isn't, because anything that involves money isn't just about the numbers, it is also about emotions. And in cases like this, there’s a lifetime of emotions floating around very close to the surface!
A couple of years ago friends had two sons graduating from university in the same year. Both universities were out of town and the deal was the boys had to pay for flights, accommodation and the hire of graduation robes, etc.
Both boys were very bright, one was working full time and had saved most of the money for graduation. The other was drifting, living in a small town with very little prospect of work, undecided what he wanted to do with his life and no money to pay towards his graduation.
Should they pay for the son that has no money to go to his graduation?
This is what they did. They lent the balance of the money to the son who has saved as much as he can to get to his graduation. And as much as it broke their hearts, they didn’t give the other son the money. “This is one of life's lessons he needed to learn.”
What would you do in this situation?
Here are a few reasons parents continue to support their adult children,
- You are genuinely concerned about your children’s financial well-being, you can see they can’t make ends meet.
- You don’t want your children to struggle financially the way you did.
- We (often mistakenly) think our children are worse off than we were at their age due to student debt and rising property prices, so we want to give them a helping hand.
There are dangerous side effects of supporting our children for too long,
- Your children don’t learn how to manage their own finances and assume we are the safety net when they strike a financial trouble.
- The sacrifices and money you invest in your children may put your own retirement income at threat.
- How do you differentiate between siblings? Helping one and not the others may be a recipe for friction within the family.
So, how do you navigate your way around this issue?
The key, as with most issues around money, is communication. In a family situation, this is easier said than done, so here are a few suggestions that may help.
- If you don’t feel that you can have the money conversation with your adult children, bring in a financial adviser or third party that can help the conversation stay on track and not get emotive.
- Be clear about what your expectations are. For example, your children move back home, so set some guidelines about contribution to the household and time frames. They may not be able to assist financially, but there are other non-financial ways of contributing.
- Be prepared for the discussion to get heated with emotional statements like, “You will never see your grandchildren again if you don’t help.”
- Be clear whether the financial support is a loan or a gift; either way, document it.
- Don’t feel guilty about saying no. You have raised your children to adulthood, and it is now time for you to enjoy your life.
- Understand what is going on in your head. Are you feeling guilty, or manipulated or are you refusing to let your children grow up? Take a step back and ask yourself, “If this wasn't my child, what decision would I make?”
- You are not alone. Many parents are facing the same situation that you are, so ask for help.
I would love to hear your stories and how you have resolved to financially support your adult children, so leave your comments below.
*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.
36 Comments
We have our eldest move back after few years of flatting and having the time of there life, until they realised they were all going nowhere. He is working, so has to pay us board and then we hold his savings account which he needs to put into each week (condition of him moving back) it will be only Short term as a few of them are moving to OZ next year. Flip side is we enjoy having him back as we are a close family, but he also needs to know the benefit of trying to get ahead in life and you can't do everything everytime if you do not have the $ and don't worry about the FOMO.
"Get ahead of whom?" It should be 'what' Zac not 'Whom' That term has been used all my life and it essentially refers to debt. In the current environment the DEBT issue is very much larger than it was when I was young. If I was a conspiracy theorist I'd suggest that banks were using it to try to control society, with or without the willing cooperation of Governments. But I'm not as we all know banks are generous, benevolent organisations who are entirely focussed on the health and welfare of the communities they serve, don't we....?
We (often mistakenly) think our children are worse off than we were at their age due to student debt and rising property prices
Come again? Maybe you could expand on why you think this is a mistaken belief, as I would put members of this generation who are better off than their parents at the same age somewhere between blue moons and unicorns.
I think it leads on to "Because back in our day we didn't have cheap flat screen TVs, smart phones, and the internet".
That and distorted discussions around interest rates percentages rather than nominal debt amounts, and referencing household incomes rather than median or average wages.
The first story.
There's more to this than meets the eye. The mother is attempting to get back at her husband/partner about something.
Probably a mummy's boy.
An NZ judge likley to reverse the will if the husband left the inheritance less the deemed living expenses from the black sheep son.
I had a relative in Oz in their own home, with another relative on contract work frequently staying several months a year for several years on nominal board ($100/wk, own room etc). Then the visiting relative lost their job, had some mental, addiction & other health issues. Homeowning relative met lawyer to redo their will & was told visiting relative could likely contest will as a dependent unless evicted in the interim. In Oz theres quite a few "no cure no pay" legal firms actively soliciting (pun intended) for such cases.
Visiting relative has since been evicted.
8. When comparing your children's circumstances to your own at that age, be objective and factual, especially when considering the cost of housing, which is by far and away the biggest expense of all (nothing else comes close - eating weetbix for breakfast, lunch, and dinner won't help). Consider average wage to average house price then and now, and don't get your back up when you realise what has happened to this country in the last 30 years - it's not your children's fault.
I am 53 and now financially secure.
I came to NZ 27 years ago as a visitor. I spent all my hard earned money to study at a University as a foreigner paying more than 3 times of university fees than New Zealanders or resident would pay, let alone the living cost. There were no support from New Zealand whatsoever (I am not complaining)
I and my wife bought a house in 2007. The interest rate was 9.3% that was about 3 times higher than rent that we would have paid. Our mortgage broker shocked to hear we only spent $20 per week for grocery. We used to buy cheapest meat cuts and veggies available. And we work much more hours than ordinary Kiwis.
I believe conditions were not better than now. If you want to get a head, you would need to work harder (or even longer) and pay necessities only. Our forefathers did that and so can you.
I am so glad my boomer parents recognized the sweet run they had had and shared that blessing with me. When I graduated in 2010 they gave me 25k towards a house deposit. It is not a lot of money in todays standards but it was the difference between me getting my own home or waiting 3 years. I am thankful for the trust they showed in me and I hope i have lived up to it. I have never had to ask for another cent from them and hope i can help my girls in a similar in the future if needed too.
I feel sorry for parents whose adult kids refuse to grow up. But boomers have had the unmerited benefit of steady economic growth over 40 years coupled with targeted social investment. So I am equally sorry for adult kids with parents who willfully suppress this truth out of pride and greed.
My Boomer parents spent my childhood focused only on their own wants. When I was s young adult they never offered any financial assistance, so I consider myself to be self-made. They had no trouble asking me for financial advice, of course, and I'll admit a mea culpa for encouraging them to invest in property.
When I married and had children of my own they suddenly wanted to to have a say in every facet of our lives. They couldn't understand why they weren't well received.
Nicola Willis would also like to love to hear your stories and how you have resolved to financially support your adult children - "In the ten week period to September 15, 2023 the number of people on a main benefit has risen by 6,768 or almost two percent, whereas in the ten week period ending September 16, 2022 the numbers were virtually flat with a very small decrease of 141 recipients."
https://lindsaymitchell.blogspot.com/
https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-r…
Boy did that headline catch my attention.
Nearly 20 years ago did a private sale of our house to my daughter along with her brother who was a silent partner in the investment. She had just come back from a year overseas and picked up a good secure job with a mapped out 10 year payroll growth trajectory. Couldn't get a mortgage yet with her new job, so we got one in our name and idea was she made the payments along with her brother. This was 2004. Figured at 32 she would be married by 37 so we had a 5 year plan. By 2009 she would have a mortgage in her name. 5 years later-no partner yet or even on the horizon, and guess what were in the middle of the GFC. Got a valuation and the value had dropped by $100k and she (we) are underwater.
Several years later we start helping her make payments because she lost her job, and new one paid nearly 50% less. Road back to where she was took 10 years. And mysteries along the way as the financial support required was growing and not declining. Finally all was known when last year found out she had a 10 year gambling addiction and would loose full paychecks at a time.
Now after getting help and an advanced degree she seems to be healing, but we got the house back and she moved cities for a better job. Only savior is finally after the Covid jump the value is up to where is seems like it was all a long forced savings/investment plan.
Now moving the house into a trust and letting her know that someday it will go back to her, but will need to wait until we depart to recoup your portion (and ours) of the investment.
Meanwhile her brother never made a penny out of his 8 year commitment to help sister. So that's where we again figure his justice will come as he will get the main home.
Messy, and stressful , but went wrong at the outset as I never expected an adult in her 30's would be so financially illiterate as i was by that time married with 3 children and part owner in my 2nd business venture.
And had never expected to sell the house to her , but when the agents start coming around to list it then the two of them approached us. Would have sold it in 2009, but she was crushed that all the hard work to that point would lead to no asset-but only a debt to pay.
That's life. It didn't take us down but we had to ride the storm.
A sad story however a real credit & congratulations to you & you family for the support & turning things around. I have a similar issue with a family member 60+ that really only came to light last year - we live in different countries & I hadn't seen them for nearly 5 years, didn't pickup anything serious on regular phone calls either.
Thank you for sharing this.
The eternal boomer. The sentiment of "throw them in the nursing home and don't visit" comes to mind.
It isn't 1974 anymore grandpa. You don't just look the boss in the eye, shake his hand and earn equivalent to 40 dollars an hour paving tiles.
You fight for a pissant room in a rotten house (owned by some boomer who bought it at 35 for 10k) to pay 250-300 a week for shelter while you earn 25 an hour. You can't afford the dentist, you might afford a second hand 90s car if you can save for a while and you certainly don't have any hope of owning a home. You fight with the infinite imported cheap labour for the remaining employment positions. If you also live under a regime which totally censors all communications and uses anti-white tyranny to impose a dystopia, purely to make the GDP line go up. You will be poorer, less free and unable to live as a decent human being.
Boomers grew up in Utopia and leave the world a Dystopia. History will remember them with the phrase "Remember to piss on their graves".
Not convinced about that. There's so much music produced these days it's a little hard to filter, but there's amazing stuff out there. As a metal head I'm being blown away by bands half my age now - the talent required to stand out is ever increasing.
Does seem to be fairly normal to get stuck in your teenage/young adult musical tastes and fail to engage in anything new though.
This is a wider ranging issue than just finance and money. A one size fits all theory just doesn't compute. So many things can affect one individual compared to another and it shows in the comments, the different outcomes and consequences between siblings that in theory were raised the same way.
I won't go into my personal story. I've struggled with many things, career, being a solo father, "wrong" choices and health challenges.
Sometimes support comes in many forms other than finance. Do we point this out as somehow wrong?
What I have come to realise is that we do have a cultural/societal deficiency in real communication. You only have to observe the commentary here, in all forms of media and our political landscape. Look at the communication challenges between and amongst the genders, especially men.
I've also come to realise that our belief in independence is false. Yes we are required to be personally response able, yet this is dependant on many factors in each individual's upbringing and experiences. We are dependant on each other in so many ways.
I'd go as far as saying we've given too much value to money at the expense of everything else.
I'm a boomer. It wasn't easy, there was no loans to learn my occupation after I left school, and when at the age of 19 I got a job overseas, my father gave me $50 as I got on the aircraft to get me through until my first pay.
I did the worst jobs after I left school, 12 hour night shifts at a plastics factory, spraying gorse with 245T and 24D (that's right, I'm surprised I'm not 6' under - without masks or any kind of protective clothing btw), pumping gas and lining shitbox, stinking houses houses in Herne Bay with gib board.
Oh, yeah, soooooo much fun!!!
Big difference between something not being fun vs an outcome not being possible.
The latter affects mental and social abilities after some time. Imagine working harder and the goal post to progression just keeps slipping away.
Not your fault, devaluation of the dollar is a part of a collapsing system, and it'll exponentially continue until it implodes
yawn your reliance on the fiat ponzi is incredible. Probably is a safe bet, a safe bet that you're being slowly burnt of real value that is.
And yes, US has defaulted many times.
Remember in the early 1900's when they made private ownership of gold illegal? (default), how about leaving the gold reserve system because of what? (default)
It's okay wingman, keep cuddling your TV and 6pm news hoping your treasuries maintain some hope of spending value as your assets are printed into oblivion. looool
The USA has NEVER defaulted on its debt. Who keeps their money in cash anyway, most have it real estate, the stock market or dividend producing assets?
No one wants gold, the price hasn't gone anywhere, no matter what that tosser Peter Schiff says, and did you know asteroids are chokka with the stuff? One survey from Israel says one space craft loaded with gold will crash it to less than half its current price.
And it's not science fiction either, spacecraft are currently digging samples, dropping it to Earth and heading off on another mission.
This is a 'damned if you do, damned if you don't' situation. I can recall just as many success stories as failures, for many varied reasons. My only advice is to be very careful and protect yourself in the process if you do decide to help. Good luck!
My own experience in a family of four, I received not one cent of help from my parents, ever. Never asked, never expected.
We plan to support our children through study and up to a point they have sufficient savings to leave. We moved to a city with more opportunities for study if they choose to and stay at home, when they start work they'll have cheap board and compulsory savings. It'll take them years to save a deposit on a house but maybe they'll group together for their first.
All things being equal: Help those that help themselves. If you help those that need it (because they haven’t tried, have given up, lack ambition) rather than deserve it you are damaging both. This applies to children as it does to society. It is also fairer and will help with countering the “I worked hard, I passed. Why do they get more than me?” if it arises. In the long run both will see it as fair and correct and create a situation where the more hard working sibling will not begrudge helping the less hard hardworking / less successful one. The less successful one will not see it as charity but more as generosity and “fair enough” their sibling did well.
When our kids were born we started regular savings accounts, $5.00 per week and any time we had a little spare we added a bit more. After 18 years its a tidy sum and helped get them into a decent car. I earned too much for my first son to qualify for a student allowance so we paid his rent. We did the same for son #2 and #3 but since I have retired they have qualified for student allowance which helps a lot. Son #4 left school 2 years ago and we are still supporting him while he works out what he wants to do. He's not on the benefit. We think he is finally moving forward with an interest in the trades. First son is now working and pays $90.00 per week board. Not so much that we need the money, more the principal that he should pay his way and contribute. The same as my parents treated me when I was earning and living at home.
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