Financial Impact of Adult Children

This recent survey statistic from Bankrate sparked my desire to write:

• 68% of parents have made a financial sacrifice to help their adult children with money

As a father of two young children (11, 9) I haven’t yet faced this situation, but let me explain how I plan to handle it.

What I Won’t Give Them

1. Money: I will not give my adult children money. Although it seems helpful at the time, it simply enables them and they will become dependent on it. It’s hard to see your kids struggle at any age, but handing them cash won’t solve their financial problems.
   

Aside from crippling their financial independence, I may also be creating an additional future burden: myself. By providing handouts for my adult kids, I may be creating a a financial hurdle that I can’t jump over during my “golden” years. This burden will potentially fall back on my adult children. In summary, I won’t enable or burden them by giving them handouts!

What I Will Give Them

1. Home: My adults kids will both always have a place to live for as long as they desire. There will be no rent payments with the only stipulation that they are using the free housing to save and invest money for their future.

2. Education: Along with the free living arrangements, I will pay for my children’s education (college, trade school, living stipend, etc.). It will be difficult to survive the future without some form of formal education.

3. Financial Literacy: Raising my kids to be financially literate is one of my life’s goals and I will always be willing to help them navigate a complicated financial situation.
   

Summary

Parenting is hard and a perfect playbook doesn’t exist, but I hope the above helps you think about how you may want to approach the financial needs of your adult children.

Disclaimer: The information in this post is provided for your convenience only and is not intended to be treated as financial, investment, tax, or other advice. The information is intended to be educational and is not tailored to the investment needs of any specific individual.  It is also not intended to be relied upon as a forecast and is not an offer or solicitation to buy or sell any securities or to adopt any investment strategy.  The opinions expressed are those of the author.  Reliance upon the guidance and information in this presentation is at the sole discretion of the individual.