When to Say No: A parent’s guide to giving adult children money

Mother giving child moneyWhen I work with clients who give money to their adult children, I am always curious why. Since preparing a comprehensive budget is part of the counseling process, the topic often comes up. The adult child may still be living at home or recently returned to the parents’ household. Or, parents may be giving money toan adult child that lives on his/her own.

Often what I see is parents either borrowing money to supplement their child’s income, or diverting money earmarked for their own emergencies or retirement to help out. Neither scenario is good for the parents because they can’t really afford to be generous without putting their own financial security at risk. Is this what your adult children would really want if they only knew?

If you give money to your adult children, you have lots of company:

The National Endowment for Financial Education completed a study a couple years ago that showed more than half the parents surveyed (59%) financially helped out their adult children who were not in college. If not in school, then presumably these young adults should be working, right?

Money was given most often for living costs, transportation, and even spending money. When asked why parents help, most replied they were “legitimately concerned” about their child’s financial well-being, while others stated they did not want their children to struggle financially like they once did.

Good reasons to be sure. But my concern is how does the adult child learn to be self-sufficient or learn to live within a budget if the parents are always willing to hand over money? Especially if the parents become financially unstable or indebted just to support adult children.

Have you ever given your adult children money?

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Initial considerations

iStock_000011225926SmallWhen your adult child comes to you asking for money, where do you begin? My advice is don’t start by pulling out your checkbook. Instead, look at the situation more closely.

First, think about whether you can really afford to help your child.

Are you living on a fixed income that barely covers your own bills? Have you been saving for emergencies of your own? Do you have a retirement plan that you should be funding? If you answered “yes” to any of these questions, look at helping your child in other ways.

Second, examine the reason why your child needs money.

Is this really a short-term crisis or more of a chronic condition? If your child can’t manage money, overspends on “wants” or has other issues that lead to money problems (possibly mental health issues or substance abuse), the situation warrants further investigation and different solutions. If you simply hand over the money, you can count on more requests for cash that will further drain your finances.

Some helpful guidelines

Establish with your child if this is a gift or a loan.

  • Consider if you can afford the gift; otherwise make it a loan.
  • Set a repayment schedule going forward. Talk with your child to determine an affordable and realistic payment and loan term.
  • Decide on consequences for missed or late payments.
  • Have your child commit to changes he/she will make to repay you on time.

Ask if your child is making any sacrifices.

  • How did this financial crisis come about?
  • What is your child giving up to meet this financial crisis?
  • How will your child prepare to avert the next financial crisis?

Consider other ways to help besides writing that check.

  • Maybe your child can move in with you temporarily until finances improve.
  • Perhaps you can temporarily provide childcare to reduce living costs.
  • Maybe you could provide a reference for job applications.

adult childrenExplore outside resources to help your child.

You could compile a list; then have your child make the phone calls.

Referring your child to LSS Financial Counseling is a great place to start. By talking with one of our Certified Financial Counselors, your child will have an objective third person looking over his/her finances. Our counselors will also make recommendations to get your child back on track financially. And remember this help is free and confidential. So, what do either of you have to lose?

Don’t be afraid to say “no”

Finally, don’t hesitate to tell your child no when you simply can’t afford to hand over money. As parents, your financial stability is just as important as your child’s. And you have less time to make up for any financial hits to your savings or retirement accounts when you put your child’s needs before your own.

I am not suggesting that you should never help your children with money. But perhaps you can make it a teachable moment to get your child on the road toward self-sufficiency, rather than relying on you as a cash machine whenever a money problem comes along.

If you or your son/daughter could benefit from creating a plan for a financial crisis, contact us today. We offer counseling by phone, in-person or online. Appointments are easy to prepare for and your child (or you) will leave with a clear picture of their situation and what next steps should be. To schedule an appointment call 888.577.2227 or start online counseling now by clicking below. The online version of our counseling allows you to enter in all of your information online and a certified counselor will get back to you with an action plan in 2-3 business days.

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Check out “How To Get Your Adult Children To Leave the Nest” for even more suggestions. Our own Program Director, Darryl Dahlheimer, was interviewed!

Author Barbara Miller is a Certified Financial Counselor with LSS and she specializes in Bankruptcy Education and Counseling.

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Posted in Kids, Overspending, Relationships
26 comments on “When to Say No: A parent’s guide to giving adult children money
  1. Hi! I’ve been reading your website for some time now and finally got the courage to go ahead and give you a shout out from Austin Texas! Just wanted to mention keep up the fantastic work!

  2. Can'tsayno says:

    I have a 23, 19, and 17 yr. old. My 17 year old is still at home. I give my kids every dollar I get, I’m always struggli, but I find myself offering .them all I have. and then worry myself the pieces over how I’m going to get by.

    • Kate Swenson says:

      Hello there. Would you like to speak with a financial counselor to discuss this? I think talking with a counselor would be a really good idea. A counselor could look at your situation ojectively in a non-judgemntal way and give you some ideas for moving forward. Email me at financialcounseling@lssmn.org

  3. Nancy says:

    My husband has been wanting to retire for a year. But family is always borrowing money. I finally told his daughter no because she has not paid back the last loan. Now she is mad at me…she is 32 yrs. old , bought 2 vehicles last year and had reposessed. Had another baby and moves all the time….we are in our 60 and 70s and cannot keep this up. She told everyone that we didn’t care if she was on the street. Now she doesn’t speak to us….my husband is upset. How do I help him to understand we can’t keep this up. Thanks

    • Kate Swenson says:

      Hi there, can you email me at financialcounseling@lssmn.org. We can talk about this offline and would love to discuss your situation and give you ideas for moving forward. Talk to you soon!

    • Jennifer Walch says:

      Hi Nancy,
      I’m working with Kate Swenson to do a TV story about this topic. Would you be interested in talking with me about your situation? I think many people are facing similar situations. My e-mail is jwalch@kdlh.com.

    • Steve says:

      please remember your grown child is an adult. I myself am having the same issues with my step-son, who is 32. He can’t keep a job for more than a month and it’s always the other person’s fault. My wife and I argue about the matter of him being homeless constantly. He is never responsible for his actions and his issues seem to always fall on our plates. Drugs, alcohol and good times seem to come first with Jeremy. He has no money but always has his cigerettes and whatever he needs that’s not good for him.
      So Nancy. YOU and your HUSBAND must stand strong. Seek your daughter the help she needs at church or the red cross. There are programs that can help her to get back on her feet. She just has to be willing to seek this help. My Stepson will not do it, thinking he’s too good for it.

  4. Diana k says:

    Hi,
    I am a single mom with 2 children. My oldest son has graduated a film school and is trying to build his career in filmmaking as a freelancer. He often ends up with no money and I come to rescue him. It happens every year.
    I had some saving and could afford to pay for a great school and a final project. He is trying to generate some income, but seems like he is not trying too hard.
    My youngest daughter is 16 and is already working part time as a swim instructor. She is working and studying hard and saving for university.
    How should I explain to my son that he needs to look for a job that pays bills and start making some savings too.
    Thanks

    • Kate Swenson says:

      Hi Diana, thanks for the comment. I am going to send your question to a counselor and have them email you back. Thanks!

  5. Janise Miller says:

    I have a 43 yr old daughter who uses this term frequently “Mom you have to give me $xx because I don’t have it” We’re not talking $10 or $20-we’re talking $500 or $1000. If I say no, or I simply don’t have it, I get the guilt trip. Suggestions?

    • Kate Swenson says:

      Hi Janise, thanks for the comment. I am going to have a counselor email you some suggestions today. Thanks!

  6. Elaine says:

    So glad this site was available to me. Sure wish I had read it sooner. My 34-year-old daughter borrowed over $5000 6 months ago for an attorney in a child custody battle she was in, and also moved in with us. Now she is moving out and says she will pay it back next year with her tax refund. My husband is mad and says that she needs to pay something monthly.
    It seems like our daughter is mad at us for something all the time and I just don’t want my family members to be like that so I don’t want to push the issue. At the same time, I am retiring in a month and can’t afford to let her just keep the money. How can I recoup my money without causing a family battle?

  7. Debbie says:

    Hi, I am engaged to a man whose grown children call him at least 2-4 times a month for money. His son is 21 and lives with his girlfriend and his daughter is 27, married and has 3-children. He has always given them money whenever they ask. We both are 60-yrs old and due to circumstances beyond our control lost everything that we own but 1-car and our jobs. We currently live with my sister and pay her rent. My fiancee makes good money but over half of it goes to his x-wife. It seems his children have always been in the habit of running out of money and going to him for it. I am starting to feel angry with them and him because we have nothing…the have cars, homes, furniture, etc but yet we are giving them money and therefore can’t afford to start building our lives again. We are not spring chickens so must start that process now. I just don’t know what to do. His kids know that we don’t have anything and don’t seem to care. In fact his daughter called last night asking for him to wire her money at 8:40pm. Like she didn’t know she needed it earlier that day? He got up after a long days work and ran to a Western Union to wire her gas money. This is to someone whom got $10000 back on her tax return and spent it all on new furniture and a $1000 TV. I am starting to resent his children and I don’t want to. My fiancee is a really good man and they make guilt him into this. What do we do?

    • Kaycee says:

      That’s the same issue I’m having. My kids make me feel guilty when I don’t give them what they want. What they don’t realize is that it’s putting financial hardship on their father and I. I have monthly bills to pay and with them not repaying us, really makes it difficult to meet my commitments. Kids can be so selfish! It’s time for me to stop enabling this behavior. I hope your fiancée does the same too for your sakes.

  8. Kaycee says:

    We are in our mid-50’s and have two adult daughters – one is 26 and the other 24. The 26 year old works and pretty much supports herself, but there is the odd time she will ask for a loan. The problem is, she never pays back what she owes us which causes problems between my husband and I because I keep giving in. The second daughter is 24, still living at home and recently lost her job. She has made no attempt whatsoever to find another one but yet keeps asking us for money left and right. The money she received in redundancy is soon to run out since I’m paying her cell phone bill and insurance every month out of it. She knows all this yet still hasn’t taken any affirmative action to find a job. We insisted that part of her redundancy money is spent on community college classes so that she can re-tool/learn new skills to be more marketable. In the meantime though, she needs to find some kind of work. I often feel they are both taking advantage of us (me) and wish they would understand that they need to learn to stand on their own two feet. I have now reached a decision that we will no longer loan/give them any more money. It’s a really tough decision for me to make because I don’t want to see them struggle, but I think it’s for their own good. They never ask their Dad for money because they know he will say no, so they always turn to me because I keep giving in to them. Would appreciate any advice. Thank you!

    • Kate Swenson says:

      Karen, thank you so much for your request for some advice regarding the money situation with your two daughters.
      First, I want to congratulate you on making a very difficult (but sound) decision to no longer hand over cash to your adult daughters! Clearly, this situation has been ongoing and very stressful for you since you are the one the girls come to. But you also understand why they come to you – you always give in and say “yes!” Now that the decision has been made, the real challenge will be to enforce it.
      I suggest that you and your husband sit down and to devise a strategy to enforce the new rule of “no more free money.” One option would be to tell the girls to go and ask their father whenever they come to you for cash. But that only works if he will definitely tell them no! Another option is to have a family meeting to set some limits and begin to change your daughters’ expectations about mom and dad being an ATM machine. Tell them straight out “there will be no more cash hand-outs.”
      Then, set a timeline for your younger daughter to find a new job. If she fails to do so, her consequence will be no more cell phone or insurance payments when the redundancy money runs out. Again, you must stick to your decision!
      You may also want to start charging your older daughter some rent to instill the idea that now that she is an adult, she should be more self-sufficient. Depending on how much she earns and her other expenses, you may charge a nominal amount ($150 per month) to make the point. When your younger daughter starts working, do the same for her.
      Fortunately, it does not sound as if the requests for money have been a financial hardship for you. Anyway, I certainly hope that’s the case!
      And to help you stay motivated to teach your daughters’ more financial responsibility, just remember that the more cash you hand over to them, the less money you can save for your retirement future and emergency savings.

  9. Shelley Kennison says:

    Hi, I just found your website and thought it very helpful. We have an almost 25 year old daughter. She has moved back home 2 times in the past 3 years. She is currently living with a roommate, but lost her job because of her attendance. I helped her try to get unemployment, but she was denied. I helped her get a credit card when she was 18, but she maxed it out and didn’t make the minimum payments. We have given her 2,600.00 the past month to pay and catch-up her bills. Now she tells us that the creditor, whom she didn’t pay, garnished her bank account which bounced her rent, etc… (the money of which we gave to her to cover everything) She calls me up crying about everything and my 1st intention is to give her more money (which we cannot afford, because my husband is currently out of work and we are living off my paycheck and his unemployment). Should I let her figure this out on her own, or help her out again?? What are your suggestions. Thank you.

    • Tonya says:

      I have son who 24 years old living with his wife.Both of them work since 18 years old.I believe, both of them makes fair amount of money every months. But my son calls me only asking for money. Is this right?

  10. Teresa says:

    Your article was great, however lacked consequences for not paying loans back. Thanks

  11. Nina says:

    hi,
    my 27 year old college graduate son is working in a job that you DONT need a degree for and lives with a few roomates. he has car payments,school loans etc. but makes stupid mistakes like not paying parking tickets. i moved out of state and feel guilty that i did. Asked him how his day was yesterday and he told me that they towed his car and he owes $600 to get it out.
    I said no to helping him because he is just plain irresposible. Feeling quilty

  12. kawe says:

    I have a responsible son and daughter in law. They are both 38 and have a home and 4 children. They both work, my son away from home and my daughter in law works from home. Believe it or not she even home schools. They do not ask me for money, however this is my only child and I give them a portion of my salary monthly. I have been frugal my whole life and my son is as well. They have a huge garden to help with cost of food and they bought a fixer upper because that was what they could afford. My grand children do not get a allowance, but do age appropriate chores. They post bigger jobs that the kids can do and earn monry. This is how the real world works. We live in a high cost of living area. I am proud of all of them. So I hope I am doing the right thing. They do not have a emergency fund and thats one reason I give to them. They do save some of if but with the cost of food, gas and utilities going up so fast, they mostly use it to help with those costs.

    • Kate Swenson says:

      One’s own personal spending choices should always, always, always be based on the budget and on values. Wanting to support your children is a perfectly fine choice. It might even be a noble choice. And if your budget supports your desire, then there’s no judgment involved in that. Just as one person might think spending money on a new mountain bike is a bad decision, a mountain biker can feel just fine about meeting their values just as long as they can afford it.

      I also don’t get the sense that you are in any way “enabling” them. They sound like they are making responsible decisions with their finances and, especially, decisions that you feel good about supporting, both emotionally and financially. So I think that if you are meeting your own spending values in such a way that you are able to afford it in your budget, then I think you are doing “the right thing.” Feel good about that and support on. 😉 Have more questions….? Give us a call at 888.577.2227 to speak with a financial counselor. Thanks!

  13. Tina marie says:

    My daughter is asking for monetary help to pay part of a school loan with no mention of when she’ll pay it back. She already had problems in the past with wage garnishment for non-payment of this loan and had to get help from her father who did so with the condition she continue her education. Problem is she is mounting up her educational debts. She is working hard and raising her two children with their father while going to school and now announced that she will be going after a double major. I fear this is really to ward off payment of the loan. She has received school loan money quarterly but instead of using it to pay the loan, she purchased a vehicle. She has implied that it is my responsibility as a parent to pay half and her father the other half. We’re divorced. but I don’t agree since ten years ago, she left home, moved in with her boyfriend, dropped the University, had two children and then two years ago started taking online classes. I am retired and concerned about my own finances.

    • Kate Swenson says:

      For starters, in my opinion, it is most definitely NOT your “responsibility as a parent” to pay for your child’s education. There are countless people in this country who pay their own way through college and/or take responsibility for their own student loans. I can’t comment as to where the root of that expectation comes from for your daughter, specifically, but I can say with absolute certainty that there is no hard and fast “rule” that supports her expectation.

      As difficult as it might be to come to this conclusion, your daughter really needs to be taking responsibility and accountability for her own choices, including (and maybe especially for) her financial ones. It most definitely is not fair to you (in my opinion) that she makes any financial choice of any kind based upon the assumption that you will be footing the bill for her, whether it’s paying for her college education or going out to dinner—especially without any conversation regarding that assumption.

      Additionally, purchasing a car with school loans is not the most responsible financial choice, either. I fear that your daughter is on the way to learning some difficult financial lessons the hard way; but they will be lessons that will ultimately be healthy for her to learn. You just might have to facilitate that learning. Set clear expectations and boundaries for yourself, communicate them to your daughter, and then you can take some solace in knowing you took the “right” steps, regardless of what she chooses or how she feels about her choices. Have more questions? Give us a call at 888.577.2227 to chat with a financial counselor. Thanks!

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