If, when your children were teenagers, you started a habit of giving each child $200 on Christmas morning, then they may continue to expect to receive that gift every year, even when they’re in their 40s.
Or maybe one of your children doesn’t have the income to support the lifestyle he or she wants or was accustomed to while growing up in your home — and you’ve made a habit of helping pay for a big-city apartment or private school tuition for the grandchildren.
While every parent wants to help his or her children, continuing to give money to grown children on a regular basis can cripple your own financial situation as you near retirement. “I regularly see clients who have set up adequate retirement planning for themselves, but are now making unplanned, regular withdrawals to give money to their grown children, often putting their own retirement in jeopardy,” says Joe Heider, president of Cirrus Wealth Management Group in Cleveland.
If you’re facing questions about how to finance your own retirement and yet feel that your adult children expect you to regularly dole out money, it can be difficult to stop, even when you can’t really afford it anymore.
A Habit Worth Breaking?
Aging adults say giving money to grown children is one of the top financial habits they’d be willing to change in order to get their retirement on firmer footing, according to a recent survey from Merrill Lynch and Age Wave, which studied 50,000 respondents over four years.
Of those surveyed, 84% said they would like to educate their family on ways to be more financially independent, while 70% said they would consider cutting back on support to post-college children. Among those Americans who give their adult children post-college financial support, the average amount given is $6,800 annually, according to the study, an amount that could contribute substantially to the parents’ own retirement.
If you’re in the habit of handing over money to your adult children and the practice is affecting your own financial security, it may be time to make a change.
The Problem With Over-Generosity
There is nothing wrong with being generous to your children, even when your children are in their 40s or 50s — so long as you can afford it. But when that generosity starts to endanger your own finances, prevents your adult child from accepting responsibility for his or her own life, or creates tension among siblings, it can become a problem. “If you’re setting up a pattern of helping a child establish a lifestyle that they can’t support, you’re enabling that child to be fiscally irresponsible, which will probably create a crisis later,” Heider says.
Such situations create a codependent relationship between the adult children and the parents, says Jim Wiley, AIF, CEO and chief investment strategist at the Wiley Group in West Conshohocken, Pennsylvania. “The kids become dependent on the money, and the parents become dependent on the emotions they feel by helping their children,” he says. “They don’t want to disappoint the kids who are expecting cash at Christmas time, or whenever they expect it.”
Finally, in many families, there may be some siblings who are very fiscally responsible, but one adult child who simply can’t support the lifestyle he or she wants. Heider says he often sees aging parents who are willing to support that one child — even when it means draining the parents’ retirement accounts and causing resentment among the other siblings.
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How to Stop the Bleeding
If giving cash to your adult children is causing similar problems, there’s nothing wrong with stopping. After all, your children are presumably capable of supporting themselves and shouldn’t need to depend on you for their ongoing survival. However, for many parents whose adult children have grown accustomed to receiving cash gifts, it’s not that easy.
“As a parent, you always want the best for your children, but you also have to put your foot down, and it can be difficult to do that, especially if you haven’t made a habit of doing so,” Heider says. “Children get used to asking for something and getting it. But when you tell them you have a fixed amount of resources and you can’t afford to supplement their lifestyle anymore, they have to accept that they have to live within their means.”
Wiley recommends asking your financial planner to redo your distributions from your retirement plan for the coming years so you can see firsthand how the gifts to your children are affecting your financial future. “Then simply tell your children, ‘Look, my financial advisor told me I can’t give you money anymore because I’m not going to have what I will need for retirement,'” he says.
If your adult child is depending on your money to finance his or her lifestyle, Wiley says to take the discussion a step further. “Tell your adult children that you and your spouse made a mistake by allowing them to depend on you financially,” he says. “Tell them that you want them to struggle like you did because it’s a chance for growth. It’s important for each person to navigate financial trade-offs to determine your highest meaning and purpose.”
Give Your Children Skills Instead
If the idea of simply stopping what has become a habit of giving money to your adult children seems too harsh or abrupt, consider helping them acquire some financial skills.
If your adult child has never learned to create and live on a budget, for example, find out if they’re aware of the apps available to help them do so, such as YNAB (You Need a Budget), Mint, and others.
Another option is to introduce your child to your financial planner; an introductory meeting with someone you trust could help set them on the path of understanding and handling their own financial matters more consistently. Plus, your child may be more receptive to receiving financial advice from someone who’s not their parent.
Finally, even if you decide that you need to stop funding an adult child, there are no rules that say you have to stop cold turkey. You may want to set a time frame during which the funding you provide will be reduced incrementally, while your adult child is learning new financial skills, training for a new career, or otherwise asserting their financial independence. A gradual reduction in funding may help give your child the incentive to make some real changes as needed.
How to Give Money Correctly
While habitual gifts of money can become damaging to an aging parent’s financial situation as well as an adult child’s future, occasional gifts can certainly be appropriate. Maybe an investment performed really well this year and you want to share the gains with your children: No problem, Wiley says.
“You might just say, ‘We had a great year and we want to give each of you this amount,'” Wiley says. “If you do give money to your adult kids, just don’t do it consistently. Never do it on a yearly basis, but a sporadic basis is great. Nobody is depending on it, but you are able to surprise them and help them occasionally.”
In addition to occasional cash gifts, Wiley recommends funding children’s or grandchildren’s educational accounts as a way of helping out. “This makes perfect sense because nobody is depending on it to fund their budget, but it’s an important way of helping your children or grandchildren financially,” he says.
Of course, if one of your children has an emergency, such as a medical issue or divorce, that leaves him or her in need of financial help, it’s okay to make an exception, Heider says. But aiding an adult child through an emergency is different from supporting a lifestyle for that child that he or she can’t maintain on their own.
Keep in mind that if you’ve raised your children to be responsible adults, they should be capable of supporting themselves. They may not yet have the lifestyle they want, but that’s life: You will not always be around to support them, and helping them learn to live within their means may be one of the most important things you can do to show your love for them.
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View Comments (48)
My husband controls the finances. He pays our grown son’s car payment, pays half of a monthly payment on a boat, buys him takeout food several times a week. Meanwhile we are retired, in debt, I had to sell my car and we can’t afford a vacation. If I bring up anything about stopping giving all that money to our son, he talks like I am a bad mother who doesn’t care about our son. He has always given our son too much freedom and spent too much money on him. I would have been stricter, but I had to battle both my husband and my son. I am so depressed and I just feel stuck until I die.
I’m grateful for all the comments helping me realize I’m not alone in this struggle. My daughter is 24 and is a sweet and lovely person. She works a full time job at a CPA office. She has an associates degree and would like to continue her education. She had a difficult childhood with epilepsy and Crohn’s Disease. Me and her father are still married and wanted to make her transition to adult living as easy as possible due to her struggles with disease. We bought her a brick 3 bedroom 2 bath home less than a mile from ours under the condition that she and her live In boyfriend would pay half the payment and the utilities. Her boyfriend is a loser!!! He will not keep a job, keeps his hair colored a different strange color every time I see him and of course she can’t afford expenses that I expect her to pay in addition to his habits and hair color geez! I want to help my daughter and keep her life easy and stress free but I’m going to have to cut her off if she continues to give our hard earned money to this idiot.
I’m 69 and have a son who thinks he’s entitled to me giving him money before my eyes are closed.I’m very disappointed in him. He’d rather do deliveries instead of getting a regular job like normal people. I had put him out before and took him back in. I now see that was a big mistake. I now know once I put him out again I will not let him back in. His behavior wears me out. Most of these young people are ungrateful and have the “Prodigal Son” mentality.
Thanks Carol. I know exactly how you feel and I am in my mid 60's and I would be interested in knowing how you are doing now. I am becoming depressed over my situation with my only child. He lives on his own but always asking for money. I never ask this from my parents. I've always been self sufficient and I don't understand why he doesn't seem to want that for himself as well. I'm about at my breaking point. Any more advice would be greatly appreciated.
I have to songs I paid child support to them but now they’re both over 18 . They still live with there mom
I want to help with the kids financially occasionally, but I do not want mom to get the money. Could you advise a proper way of doing this without sounding like I’m buying their love. And to ensure that the kids are getting the money, not the mom.
My partner has a 25 year old daughter from a previous relationship. Even though he fully funded her education, she never worked and now opted for a 4 year doctorate. She insists all her time is used on research and she can not work. My partner is obsessed with the idea of her having the title. Her faculty does not fund this vanity doctorate and he is nearly 70, has various health issues, yet continues working fulltime to pay for everything, tuition, rent, food, electricity. She now went on a 4 week trip to Asia, he is paying.
She calls him when she needs heavy furniture moved and even though she has a tall strong partner, she calls her old Dad. He is entirely enslaved. We don't live together, yet when he visits I cook and buy things. When I visit his house, he is mean, reprimands me on using too many olives and even took away a bag of peanuts, claiming I had eaten enough. I'm very hurt, I get zero respect, his life only revolves around her. When I mention the absurdity of the situation, he gets insulted, telling me I have no right to attack her. I'm at wits ends. I so much wish I could leave him, but I still have feelings for him.
I have a 28 yo Daughter that is on SSI and food assistance. We absolutely can not live together because we are like fire and gasoline! I pay 1/2 her rent and all of her
Utilities so we don’t have to live together. I am out about 800.00 a month. I am beginning to wean her off because
Although I do make a 6 figure income, at 46 I need to start thinking about my own financial future and retirement. It’s gonna be tough but I have to
Do it.
I have a daughter age 28 and a son age 22, both living in the same city, My daughter has a good paying job and my son is halfway through college. We provide for our son's education, including groceries, the use of an older car and gas just like we did for our daughter while she was in school . Any incidentals such as entertainment expenses are on him. My son took a gap year last year and was fully self supportive during that year. When they came home last year, they drove in my daughter's car since it was newer and they split the gas money. All is OK so far, right? This year, my son is completely dependent upon us again for gas like I mentioned earlier. When they came home for Thanksgiving, they told us that since we pay for my son's gas and my son in the car, we pay for all the gas. I replied that it made sense to split the gas responsibility between the two like they did last year and we would cover my son's portion. This opinion was not popular with my daughter. She said what if my son was to drive them both home, would you expect me to pay half? I said yes. My thought is that we are obligated for his financial responsibilities and not treating the transportation of my son as a free ride for my daughter no matter which car they took. The fact that we are covering my son's gas money doesn't change the amount he would normally be responsible for. Any comments would be appreciated.
Over the last several years I have "loaned" my son money based on his promise to pay me back and he did at times in the beginning. Since then he constantly needs money, harasses me until I say yes, and promises me that he will pay me back in a couple of days but never does. I have records of ATM withdrawals, hotel payments, and more. Is there any way I can recover at least some of this money. I am 77 years old and my retirement accounts have lost value due to the current economic circumstances. He is 52 years old and is on SSD. He receives $2,500 per month and wastes it on cigarettes, hotels, Uber rides, ordering food, drinks at pubs, but never even pays me back one penny.
I have 3 children, for the most part I have 1 son that is very money responsible, other one somewhat, my daughter not so. She borrowed money and promised to pay back, when comes due avoiding me like the plague. I’ve help her several times, let her son lives my husband and I 3 times and we are on a fixed income only having social security. We are struggling to make it. I think what hurts me most is she can go camping with her friends only out of guilt visit us on holidays like Christmas and whenever we are in in the hospital or sick can’t come see us. She always visit a friend or so call like a mom and stay with them. I feel used and unloved!
I have the same situation with my 52-year-old son. Constantly "borrows" money but never pays me back. This has been going on for years and the amount of money he has taken from me is in the five digit thousands. If this keeps up, I will go broke at some point. There comes a point where you must say "no."
I'm going through the same with my 50yr. son. I need to change this habit and it's hard. he lived with me for 4yrs. I sold my home he has his own appt. now & I'm searching for mine. he still calls looking for money! I need help
My parents have supported my older sister her entire adult life. They opened her a business, 100k, bought her a car 30k, international travel, plane tickets, and college for her daughter who never visits despite living in the same town. She has defaulted on loans she owes them over a 25 year span. My best guesstimate is well over 200k. One occasion, she borrowed 25k with the agreement that when she sold her house, at that same time, she would pay them back. My dad asked about it and she literally pitched a hissy fit, attacked his character and didn’t speak to either of my parents for at least a year. Fortunately, this ridiculousness hasn’t and will not affect their retirement. Currently, they are paying her mortgage, taxes and insurance plus pest control etc., on a house she hasn’t lived in for well over 2 years, 30k. She rolls in at thanksgiving to sell her house. All kinds of problems with that deal which lead to my parents loaning her 30k for a roof so she can sell her house. Today she calls, from we don’t know where from a motel she’s living in bc it’s too cold for them to stay in their 26 ft camper trailer. There is a lien against her house and she can’t sell it unless she settles that for 5k. Both of my parents have Parkinson’s and I’ve moved from Florida to live will them as long as I can. I feel privileged to be able to be with them and tend to their care but it is a real sacrifice. My mom is full time caregiver as her PD has not advanced as far as my dads. This behavior is so bothersome in so many ways. And it all started with a loan when she was 18 bc she got married. And will never stop. Oh. She doesn’t work and her husband earns over 100k. In case you are curious, my husband and I have never asked or accepted money from my parents. We are 53, I’ve stayed home to raise our three responsible children. My husband has provided for our family on a middle class income. Our goal has been for him to retire at 60 years old with 4 million in savings. Maxing our Ira contribution from day one and never lowering it even as expenses increased with three children was first. Shopping thrift, home birthday parties, planning for vacations, NEVER letting the one credit card we have roll over a balance to the next month, we are on track to meet our goal. Extremely blessed. So as they send a check to settle the lien tomorrow, she will sell her house to pay off credit card debt knowing full well she has my parents money to bail her out the next time. Hard work and living below your means financial independence.
Ironically, my sister will inherit millions for being absolutely terrible to my parents and financially irresponsible.
As a blended family . Our children are all adults and married. But every year my husband sends nice amounts of money on the check for his Doughter and her family but my adult children don’t count I have been strolling with this issue for 40 years any suggestions it breaks my hearth .wether it’s their birthday or the xmass holiday. My adult kids don’t get anything it is always arguing about this issue . Please help.
I too have a blended family of yours mine and ours. My husband and I have been married 25 years and we have six kids. We have always treated the kids the same. So at Xmas we made sure they all got the same value of gifts. And trust me it was a great move. As adults we have helped them with doing things and letting live at home but we did not pay for college because we felt it would mean more if they did it themselves. We also supported if college wasn’t their thing. How did it turn out? Well 2 chose no college. I think that you and your husband should treat your kids the same and you both should be discussing what that could be and how much to give, 40 years is a long time to have been weighing on you
I'm so sorry to hear this. I'm in a similar situation. Do you have a shared account? Why not just issue tge same amount to your kids? Why is his child deemed having more worth than yours? What a horrible situation.