Family money: Susan Hely

Parents may need to get tough with adult children to encourage them to be self-sufficient

‘“Parents are too lenient and coddling. Why would kids want to move out?”

When Kim Abraham’s adult son tells her to get his room ready because he wants to move back home, she just laughs and says no, that’s not going to happen.

“No matter how bad their story is, I say no. I tell them this is what is going to give you confidence. They have to know they can get through hard times and they don’t need a safety net,” says Abraham, a clinical therapist who writes for the online parenting guide empoweringparents.com.

“You almost have to push them through it so it gives them confidence that they can make it,” she says.

Helping your adult children to be financially self-sufficient can be tough. While I left home at 16 desperate to be independent of my strict father, kids these days don’t want to lower their living standards and live in a small space, unable to afford all the things they get for nothing at home.

Around 44% of 20- to 24-year-olds live at home, as do 17% of 25- to 29-year olds. The percentages are higher in NSW because of high property prices and rentals.

What this can mean for many parents is that they continue to treat their adult children as if they are young – cooking, cleaning, washing as well as paying bills such as utilities, car insurance and even technology. What do they get in return? While some grown-up kids are great company, others are moody and critical of their parents.

Parents need to take care of their own financial well-being and explain to their kids they aren’t going to keep being the parental ATM. Kimball Lewis, the CEO of empoweringparents.com, says one of the reasons he got into the business of advising parents was that a wise friend told him: “One of the most important financial moves that you can make is to ensure that your kids are self-sufficient, perhaps just as important as saving for retirement.”

I didn’t mind living with very little money when I was young – it was fun. No one else in the shared house had any money either. But it is harder for young people with casual jobs to secure a lease as I did. Landlords do credit checks and want bank records and references. Then my expenses included rent, food and bus fares – no mobile phone, computer, wi-fi, takeaway coffee or cafe bills.

Some parents I know go guarantor for their kids’ rental properties but are fearful they could be left paying the rent.

Kids are good at making parents feel guilty if they ask for rent or utility money. “Parents are just too lenient and too coddling,” says Abraham. “They provide such nice places for their kids. Why would the kids want to move out?”

She explains that not all parents can ask for rent and money for bills. “Often they are too afraid to mention it.”

But even if your kids get upset, parents need to know that they are doing the right thing, says Abraham. If you don’t, you are teaching your kids that they can take advantage of you and they need to be dependent on someone.

Even if your child is used to all the comforts, you don’t have to demand new terms for them living at home all at once. This will probably result in you backing down and your kids saying you have gone too far, says Abraham. You can still start with baby steps and stick with them.

Start by asking them to contribute to the electricity bill or the cost of food.

If your child isn’t saving, which is one common excuse for still living at home, Abraham recommends you ask them to contribute $500 a month towards household costs. Put $200 towards bills and $300 in a savings account for them.

“This teaches your child that they need to contribute and not blow it.”

You could ask for rent and put it in a savings account for your adult kids – but don’t tell them of your plan in case you change your mind. After a few years, you can give them the money and help set them up financially.