The question about when parents should stop supporting their adult children is common nowadays. Parents find themselves supporting their children naturally. Sam Tabar tries to explain the situation as it is in his article “When Should a Parent Stop Supporting Their Adult Children?”
Parents always get the urge to support their children with some expenses even though they are already adults. Some may pay rent for their child, and some may pay other expenses. So the question remains, when should parents stop paying bills for their child?
A survey done by Fidelity between the age of 25 and 35 found out that 47% of the people admitted that their parents assist them with some of their expenses since they began living on their own. Some of the expenses paid by parents include:
- Entertainment and utilities – the survey found out that this was at 14% each
- Cell phone – was at 21%
- Groceries – was at 20%
- Rent and mortgage – was at 12%
Federal Reserve revealed that half of the American population has less than $400 in savings, while the millennial surveyed an average of $9,100 in savings. It was clear that half the millennial have invested their money and have also saved in retirement savings which means they are preparing for the future. So how does this affect parents? Are parents sacrificing their financial wellness to help their adult children?
Sam Tabar advice to parents is that they should pause and take a look at where they will be financially when retirement time comes. Some parents may be well-prepared while others may be risking their financial wellness to help their child. However, since half the adults have less than $400 in savings, they are affecting themselves in a negative way by continuing to help their adult children with their expenses.
Sam Tabar adds that if your child has over $9,100 in savings, chances are they can afford to pay their bills. A child should take responsibility for their finances at this point. It’s true they will struggle at first, but they will soon adjust.
Parents should also discuss their child’s financial situation if the child has a steady income. Parents should also discuss the differences between needs and luxuries to their child.
Tabar is an attorney and investment specialist. Mr. Tabar focuses on the law concerning commodities investment and hedge funds. Tabar is also the Chief Operating Officer for FullCycle Energy Fund. Tabar has spent most of his career overseeing budget strategy for financial institutions.
Tabar worked at Merrill Lynch (Bank of America) as Head of Capital Strategy. His role was to provide fund managers with a targeted introduction to institutional investors such as foundations, funds of funds of family offices, endowments, and operations.