The Wall Street Journal’s “Wallet” section notes,
In addition to moving back home with the folks, some adult children are relying more and more on their parents for financial support–a situation that can put added stress on already weakened retirement accounts and strained family budgets.
The short piece, illustrated with a boomerang, recommends sitting down with them to go over a budget, cut off lifestyle expenses, and set the term limits of parental support–in amount, purpose, and timeline. (Yesss!)
Author Anna Prior also quotes a young financial counselor, Rebecca Schreiber, with this reassurance to parents that it’s OK to say ‘No’:
The worst thing a parent can do in this situation is to apologize to the child because it sends the wrong message. “It makes it seem like the parents have failed the child in some way and that is not true,” she says. By apologizing, “you are reinforcing a sense of entitlement to financial support for children in their adulthood.”
Instead, emphasize how this is an opportunity for freedom, as a way for the child to gain more independence and control over their own lives. “It’s about building strength through the knowledge of being financially independent,” says Schreiber.
Although the WSJ heads the piece “How to Cut Them Off,” I hope no one confuses this kind of clarity with “tough love.” The latter means giving no support. The economic crisis has started a lot of people thinking about the problem, and the consensus is: of course parental bailouts; but what’s the Deal?
A commenter named Rudy replied as follows to the Wall Street Journal piece:
I’m a 23 years old, started my career in September, and still live with my parents. While I understand and agree with some of your points against supporting a young adult, my parents are putting me in a really good position to help myself and them in the long run.
I do not pay rent, but I pay my share of the cable/internet bills, my cell phone bills, my car insurance, car repairs, gas, and obviously any type of entertainment.
My main point is that I really don’t drain my parents at all, being that the house was built for a family of 4-5 people. I do eat their cooking for free from time to time, but I don’t eat ridiculous portions so it’s not much extra for them. I help out with various chores to keep the house in decent shape. All the while, I am saving like a fiend.
When I finally move out, which could be this fall or the year after, I will be debt free, and have a ton of extra money to invest or accumulate in savings. You better believe that a good portion of this extra money I have will go towards my parents’ well being when the time comes for me to return the favor. Think of me living at home as another investment, and for my parents, it’s the easiest one they’ve made. It’s only easy, however, because I’ve been making some responsible financial choices. This won’t always be the case when young adults live with their parents, but sometimes it can be a win-win situation.