I chuckle when I hear people talk about parenting as an eighteen-year responsibility. Eighteen? I passed that age more than a few decades ago and my Mom still takes care of me. Okay, and I take care of her, too. I also don’t expect to be turning off the tap for my 22-year-old any time soon. Still, some parents wonder when they’re supposed to be done supporting their adult kids financially. There’s no easy answer.

The idea that there’s an age when you can kick your kid out of the nest and they fly on their own has felt antiquated for a while now. There are a number of reasons kids continue to depend on their parents even after they can legitimately be called adults. The uneven economy—which was blown up by Covid—has made it harder for young adults to land jobs that can fully support them. Many college students are graduating with hefty debt. And housing is taking a bigger bite out of monthly budgets.

But it seems there are other reasons parents continue to help out their kids. One is that they always have. It actually takes some conscious weaning to hand over responsibility for things like car payments, insurance, and the shared cell phone plan. Some parents equate financial ties with emotional ties. They see it as an expression of their love.

Deciding on the right level of support

A lot of parents land somewhere between completely cutting the kids off and forking over everything they ask for. When a young adult is just starting out, financial support from family can make a big difference. Their early career choices can be based on building experience rather than maximizing salary. They might have more flexibility to live in a location with better opportunities. Or they could explore additional training that sets them on a better path.

It’s important to understand your reasons for providing financial support. First, make sure it’s because you want to, not because your kids demand or expect it. Perhaps your parents helped you out early on, and it feels good that you can do the same. It may help you rest easier if your kids can avoid heavy debt. It’s also an opportunity to share lessons about making good financial decisions—even if you’ve learned some of them the hard way.

Now, it’s possible that your child may not want any financial support. Maybe they really want to try to make it on their own. Or, they might feel like there are too many strings attached, whether real or emotional. Respect their boundaries, and let them know you’ll be there if they need you. After years and years of self-sufficiency, my parents provided a vital safety net when I got divorced. It was hard to ask for it, but it sure made a difference.

Make conscious decisions

Things can get complicated when you’re deciding to continue helping out grown children. Here are just a few things to think about:

• Know what you can afford so you can give without cutting into your own safety net. If you’re retired or nearing retirement, make sure you can live your life without worrying about making ends meet.

• Set limits. For example, offer a fixed amount to help purchase a car or a home. Don’t make open-ended promises.

• If you’re not sure that the money will be handled responsibly, you might instead offer to set up a college fund for your grandkids or help pay down student loans.

• If you have more than one child, be sure to think about how your support will be perceived. One sibling may feel they deserve more money because they have a lower paying job. A sibling who’s childless may call it unfair if you set up college funds for the grandkids. There are no right answers to these dilemmas. But your kids will probably handle it better if you explain your decisions.

At the credit union where I led marketing until 2017, I conducted some focus groups with young adults. They all said they learned about managing money from their parents—either because their parents took the time to teach them, or because they did a bad job with their own finances. Thinking back on that reminds me how much we make a difference in the lives of our kids, even when they’re no longer kids.

Be sure to factor in your children when you work on your financial plan. Your financial advisor can help you figure out what kind of support you can afford, and what type of strategies might be best to assure long-term security for all of you.

Questions to think about when kids need your support:

• Are both parents discussing the financial needs of your kids? It’s important to be aligned, even if you’re in different households.
•  Are you considering your own needs first? In the long run, the best gift you can give your kids is your own independence.
• Are you saying ‘yes’ when you wish you could say ‘no’? Don’t try to solve relationship issues with money.

Action steps:

• Consider giving your child a financial plan as a wedding gift or when they land their first real job.
• When you’re talking to your kids, be sure it’s a dialogue and not a lecture. You’ll learn a lot about their priorities and about how their generation views money.
• Talk to your financial planner about estate planning strategies that could have tax benefits for giving money to your kids. This gives you the pleasure of helping them now rather than after you’re gone.

The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.