If you thought you’d have an empty nest by now but don’t, you’re not alone. A recent Pew Research Center survey found that approximately one-third of young adults aged 18 to 34 are still living with a parent. Rising levels of student debt and persistent inflation are just some of the reasons parents may need to lend a helping hand.
But supporting adult children while maintaining your own financial stability can be challenging. It’s a delicate process of offering resources without compromising your own financial goals. Whether you’re helping with education expenses, housing or unexpected financial emergencies, finding the right balance is key. Here are some strategies to help navigate the situation more effectively for everyone involved.
Laying the Groundwork: Setting Financial Boundaries
It’s crucial to assess your financial situation at the outset. Write down your current savings, income and expenses to determine how much support you can realistically offer without threatening your own financial security. Establish clear boundaries regarding the extent and duration of the support you’re willing to provide and communicate these boundaries to adult children. Create a detailed budget that reflects your increased expenses and stick to it to avoid overspending. Have open and direct conversations with your kids about your expectations, including a realistic timeline for when they should become financially independent — and reassess it regularly.
Promoting Financial Responsibility
If necessary, encourage and support adult children in seeking employment or exploring other ways to improve their financial situation. This could include helping them pursue opportunities to develop skills that enhance their earning potential. Instead of offering financial support as a gift, you might consider loaning your children money with clear repayment terms to promote financial responsibility. Advise them to explore available resources like government assistance programs to reduce their reliance on your support. If they’re living with you, consider asking for contributions to household expenses, either financially or through chores. For instance, they could take over lawn care so that you can save on maintenance services and help offset the cost of supporting them.
Keeping Retirement in Focus
Prioritizing your retirement savings is paramount. If at all possible, avoid dipping into those funds to support your adult children. Consult with a Financial Professional to develop a plan that balances supporting your children and securing your own financial future.
Put Your Oxygen Mask on First
On airplanes, flight attendants instruct you to put on your own oxygen mask first, so you can take care of those dependent on you for help. Similarly, you want to secure your own personal finances before extending yourself to your children. They have a much longer timeline for earning and saving than you do, and it will be harder for you to recover should you fall seriously behind. By setting clear expectations, encouraging your children to work toward independence and maintaining a steadfast focus on your retirement goals, you can manage the balance between providing support and ensuring your own financial security.