Straight Talk Helps Get Adult Children Off the Payroll

Suzanna De Baca -- Expert Business Source, 3/23/2007 6:46:00 AM

Are you continuing to subsidize your adult children’s’ lifestyles long after they’ve left the nest?  If so, you are not alone. According to a recent survey by Putnam Investments, approximately 45 percent of middle-aged workers with grown children provide financial support of at least $2,500 a year.

While that amount may not seem excessive, parents are forking out cash to their grown children not only for help with “extras,” but also to help them meet monthly expenses, and many report that feelings of guilt or worry prevent them from stopping this behavior.

”I feel like it is my fault that they can’t manage their money,” says one business owner, “I didn’t do a good job of teaching them how to handle finances, so I keep sending checks instead of telling them that I feel used.”

If you feel good about sending your adult children money, fine; but if not, talking honestly about your feelings about their financial habits is a good first step to correcting the problem.  If you find yourself resentful or angry that your kids are still using you as the bank, it is up to you to break the cycle.  Now is better than ever.  What can you do to help your kids become financially independent as adults?

Learn to Talk About Money Unemotionally:   If you feel uncomfortable talking about finances, work to bring up the topic in a straightforward manner.  Communications professional recommend using “I” statements to express yourself, such as “I feel uncomfortable that you continue to need my financial help and I want to talk about how you can become self-sufficient,” or “I feel confused that you buy expensive cars but turn to me for rent money;  I want to talk about your choices.”

Set a Schedule:  If cutting your kids off cold turkey seems cruel or would leave them in a bad spot, work with them to create a schedule to become financially independent.  Let them know that you’ll continue to provide support for a specific period of time;  for example, “I’ll continue to help with your mortgage for twelve months, which should give you time to figure out how to budget or rearrange your priorities.”

Focus on Now:  Teaching children about money is complicated and difficult under the best of circumstances, so if your offspring grew up without become models of money management, don’t berate yourself.  Obviously, you have a lot of company if 45% of parents still have adult children on their personal payrolls.  The key is to teach them now that they are responsible for their financial lives and that you are there as backup, not as the everyday bank account.

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Suzanna de Baca is President of Private Capital Solutions Group.  She is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 7 Hanover Square, New York, NY 10004, (888) 600-4667.  Securities products/services and advisory services are offered through PAS, a registered broker/dealer and investment advisor. Private Capital Solutions Group is not an affiliate or subsidiary of PAS.

PAS is a member NASD, SIPC.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.