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Launch Your Kids on Their Own Financial Flight

How to Financially Support Adult Children

June is here. A magical time when vacations begin, out of office voicemails are the norm, weddings abound,  and our college kids come home. And for some of us, we get to see the fruit of our first two decades of parenting as they cross the stage as graduates. 

But with this new stage of adulthood, we’re faced with the next challenge in having college age children (besides keeping the fridge stocked and the laundry room navigable!) – knowing how to transition them financially to become self sufficient.   While we all long for the day when our kids come “off the payroll”, it can actually prove intimidating for a number of reasons. 

How to Financially Support Adult Children

Let’s face it, paying their cell phone bill, auto insurance and gas money is a way we can continue to stay close. They can’t stay gone forever as long as we provide the grease to keep life moving. After all, we rationalize, these expenses are staples in our grown-up budget, but a big deal to a new college grad. Plus, none of us like conflict and we don’t want our kids to feel unloved if we just “cut them off”.

The truth is, most of us know better. We know it’s unhealthy. We know our kids need to become self-sufficient. We know it’s OK for them to struggle a little. And we also need to recognize the financial transition into adulthood is uncomfortable for both of us. But where to begin? 

Here are a couple tips to give you courage to launch your chicks on their own flight and build a healthier financial relationship.

(1) Open Conversation

No surprises, just open conversation. Don’t just stop paying their cell phone bill or Netflix subscription and announce “The gravy train has ended!” Instead, use this summer to find some time to have an intentional conversation. Go to breakfast or lunch and open up by asking, “How are you feeling about life now as a graduate?” Continue to ask with genuine curiosity about their job search plan, how long they’re expecting to live at home, and reassure them they have your full support. Remember, as part of your goal to establish a healthy style of relating as adults, try to have this conversation as you would with a peer, not a child.

(2) Don’t Rush It

Change doesn’t need to happen overnight. After opening up the conversation with respect about their thoughts (in which you may be pleasantly surprised by their maturity!), this is the perfect time to explain what you’ve been thinking. Something like this might be a good approach: “We want you to know you have our full support, but also we want to help transition to you the expenses we’ve been paying like your insurance, etc.” At the inaugural conversation, it’s likely premature to establish deadlines, but the intent is just to begin planting seeds, opening up the dialog and begin treating each other like adults.

(3) Encourage Through Struggle

Struggle is OK. Your child may be surprised or really uncomfortable, but that’s normal and OK. Success in life requires us to prioritize decisions and manage choices, especially with money. By telling them you plan to turn over expenses once they have a job and have received their second paycheck (for example), you’re really communicating “I believe in you. You can do this.” Your kid won’t live at the same lifestyle they’ve grown up in, but they will have the freedom of making choices as an independent adult.

(4) Avoid Micro-managing

Stay close and then back off. Keep the dialog open about financially transitioning during the period until they start their new job, but expect to back out quickly once they take things over. If you’re going to treat them like an adult, do so. Don’t micro-manage how they use their money, unless they specifically ask for your opinion or help juggling bills or budgeting. 

(5) Lumps Vs. Stipend

Help if you must, but only in lumps. The reality is there are some circumstances where our kids really do need some help. The car breaks down. The apartment deposit. Bail money (just kidding!) If you feel there really is a need that requires your financial support, do so in a lump sum, not as a monthly stipend. Giving $1,000 to help with a car repair is one thing. Giving $500 per month so they can afford a different apartment or car payment is another. The monthly stipend feeds the enablement scenario and communicates “you’re not quite there yet.” The bottom line: one time “bail outs” are acceptable, regular support is not.

With these 5 tips, you can begin thinking about how you will approach the uncomfortable financial conversation with your children. You also may be wondering if they understand the basics of personal finances. A great way to ensure their financial success is to start by explaining the 6 money decisions to them or download this financial organization checklist below.

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ABOUT THE AUTHOR:

Shane Tenny, CFP®

Shane Tenny, CFP® and Partner at Spaugh Dameron Tenny, LLC