Help­ing adult kids takes its toll on par­ent, child

The Denver Post - - BUSINESS - By Re­becca Kennedy

With more adult chil­dren re­turn­ing to “the nest” in their 20s, many par­ents have had to pro­vide fi­nan­cial as­sis­tance to their sons and daugh­ters for longer than they ever ex­pected. Even when an adult child lives in­de­pen­dently, they some­times still rely on mom and dad for help mak­ing ends meet or af­ford­ing some of life’s lux­u­ries.

Most par­ents are at least some­what aware of the prob­lem this presents as it per­tains to their child’s abil­ity to learn to func­tion as an in­de­pen­dent adult. But they are un­aware of some of the un­in­tended con­se­quences.

First, the ob­vi­ous prob­lem: Con­tin­u­ing to pro­vide sup­port with­out a set end date cre­ates a crutch for the child that al­lows them not to learn how to pro­vide for them­selves, de­lay grat­i­fi­ca­tion, or dis­tin­guish and pri­or­i­tize their “needs” and “wants.” I’m not ad­vo­cat­ing that your child go with­out food, cloth­ing, and shel­ter. But as a fi­nan­cial ad­viser, I have seen many clients, who are the par­ents in these sit­u­a­tions, lose their sense of per­spec­tive.

We are all guilty of blur­ring the line be­tween needs ver­sus wants. When it comes to par­ents help­ing their chil­dren, I’ve heard ev­ery jus­ti­fi­ca­tion in the book. They cite safety as a rea­son their child needs help pay­ing rent to live in a new apart­ment build­ing in an ex­pen­sive area of town. Or, the need to stay in com­mu­ni­ca­tion with their child trans­lates into keep­ing him or her on the fam­ily cell phone plan, for which the par­ent pays.

These ac­tions stem from a good place, but is this more help­ful or more hurt­ful in the long run? Par­ents need to take a long-term per­spec­tive here and as­sess hon­estly whether their fi­nan­cial as­sis­tance is de­lay­ing the de­vel­op­ment of a nec­es­sary set of skills. Even­tu­ally par­ents may be un­able to help fi­nan­cially. Teach­ing your child to be­come fi­nan­cially in­de­pen­dent is one of the best tools you can equip them with for their adult life.

The sec­ond is­sue is the fi­nan­cial strain this can place upon the par­ents. Most fi­nan­cial ad­vis­ers have at least one story where their clients would have been fi­nan­cially se­cure for their own re­tire­ment if it weren’t for the bur­den of pro­vid­ing for their chil­dren, who seem to suf­fer one money prob­lem af­ter an­other.

Par­ents rarely con­vey the neg­a­tive im­pact of help­ing their adult chil­dren, ei­ther be­cause they don’t want to place guilt or ad­di­tional bur­den upon their chil­dren, or be­cause they don’t re­al­ize the sever­ity of the im­pact them­selves. Of­ten, the fi­nan­cial help pro­vided comes in smaller con­sis­tent in­cre­ments rather than one big lump sum. Both can have a neg­a­tive im­pact upon one’s fi­nan­cial se­cu­rity. The only dif­fer­ence is how quickly and ob­vi­ously this im­pact oc­curs.

A third con­sid­er­a­tion is the ef­fect upon the fam­ily dy­namic. Help­ing one child can cre­ate strained re­la­tion­ships among sib­lings, even if the other sib­lings are do­ing well fi­nan­cially. It’s be­cause, on some level, we equate gifts with love. Help­ing one child more than an­other can feel like fa­voritism by the par­ents. Even if the fi­nan­cially sta­ble chil­dren in the fam­ily would refuse the money, I rec­om­mend that a sim­i­lar of­fer of help be ex­tended to them.

For par­ents of teenagers, the best thing you can do is com­mu­ni­cate with your chil­dren about money and the length and amount of fi­nan­cial sup­port you are will­ing to pro­vide. For ex­am­ple, it may be OK that the child moves back home af­ter col­lege if they are ac­tively look­ing for work and con­tribut­ing to the house­hold by do­ing chores and/or pay­ing a mod­est amount of rent. A rea­son­able time­line for this liv­ing sit­u­a­tion can jump­start the child in their ca­reer rather than al­low­ing them to wait for the per­fect job in the cor­ner of­fice.

For those al­ready sup­port­ing adult chil­dren, turn­ing the tide is tougher but not im­pos­si­ble. It be­gins with com­mu­ni­ca­tion and set­ting real­is­tic, agreed upon ex­pec­ta­tions. Most im­por­tantly, it ends with stick­ing to those man­dates.

Re­becca Kennedy is a Cer­ti­fied Fi­nan­cial Plan­ner and founder and prin­ci­pal of Kennedy Fi­nan­cial Plan­ning, a project-based and flat-fee fi­nan­cial plan­ning prac­tice in Den­ver.

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