It's Time to Cut the Financial Cord

Why you should stop paying your adult kid’s bills

Photograph by Getty Images

The Klines have a problem. Anthony Kline, the 26-year-old son of 57-year-old Kathy Kline, is living in what is supposed to be an investment property for the entire Kline family. You see, when Aunt Irma died, she left behind a three-bedroom ranch style house and the Kline sisters (of which there are three) decided that they would spruce up the place and turn it into a lucrative rental.

Their parents, Anthony’s grandparents, approved. The trouble is, Anthony doesn’t want to pay rent. He doesn’t think he should have to. His mom Kathy can’t bring herself to set any boundaries and Anthony’s aunts can’t understand why Kathy is allowing Anthony to take advantage of her and them. The family argues. Anthony ignores them.

This scenario, as you may be aware, is becoming more and more common. “I see it repeatedly,” says Manisha Thakor, founder and CEO of Money Zen Wealth Management. “Parents are paying their young adult children’s bills and they can’t seem to stop themselves.”

Thakor is not without compassion for these parents. She explains how they’ve seen their kids bust their butts in school, only to graduate and be faced with a tough job market. And unlike prior generations, kids are coming out of college with huge student loan debt and no income.

“Mom and Dad are looking at the situation and saying ‘Let me help,’” she says.

In Thakor’s financial advisement practice, she sees several things contributing to the rising problem of kids with no strong “financial literacy” and notes that one of the root causes is the fact that society doesn’t encourage our children to learn how money works. If parents teach their kids, great — but there’s no system in place to make sure that kids have a sense of what it means to be financially responsible.

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Thakor also refers to something she labels “lifestyle inflation expectation” as being a big part of the problem. “We’re constantly bombarded by media images of what an average lifestyle is, your base expectation of what you should have, and this often fuels you to feel you need things you simply can’t afford,” she explains. “If you have student loans, a job that isn’t paying what you’d hoped for or no job at all, this can cause the expectation that Mom and Dad will step in to help.”

But that’s exactly what mom and dad shouldn’t do — if they want to raise a self-sufficient, thriving adult child. Instead, by assuming responsibility that isn’t theirs, they’re teaching their children that having a lack of discipline or awareness to really differentiate between needs and wants is perfectly acceptable.

The solution? Thakor encourages parents to have a game plan and to address the situation the way you would any business transaction. What you’re ultimately trying to do is teach your kids to fend for themselves in the world.

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“Have a time frame and guidelines around any help that you’re giving,” she advises. “These boundaries will set everyone free. Parents will know when financial obligation ends and this will help children step up to the plate.”

Alison Seligson, a personal finance and cash flow expert, echoes Thakor’s sentiments. “When you do for your adult child what they should be doing for themselves, you are creating a dependent person,” she says. “Being self-sufficient is part of the natural order of life. We’re not meant to be dependent. We’re meant to survive.”

As for the Klines, they’ve made some progress. After getting pressure from her sisters, Kathy Kline finally drew a boundary with Anthony, telling him he could continue to live in the house under one condition: he needed to get a job. And he did. It may be part-time and it may not be fulfilling his potential, but he has an agreement with his mother that he will continue to work and contribute rent. And this makes the whole family happy.

Tags: Parenting

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