Things to avoid if you want your grown kids off your payroll

If you’ve ever wondered whether an “empty nest” equals an empty bank account, here’s your answer: it doesn’t have to.

And yet, according to a nationwide trend, over two-thirds of parents over the age of 50 financially supported a child older than 21 in the last five years. The practice is so common, in fact, that psychologists named this period of extended child dependency "emerging adulthood." There are, however, ways to raise up a generation of money smart kids and financially independent adults, says Scott and Bethany Palmer, money relationship experts best known as  The Money Couple,®.

Of course, you want them to call home and to be a part of their exciting new life, but does that mean you should be paying for it? Millions of Americans are, but at what cost? Should you wait to retire to afford their new lifestyle? Do the home repairs stay on hold while you pay for their living arrangements? How much do you need to fork out until they find themselves?

And more importantly, perhaps, is when will it end?

The Palmers say not any time soon, if you’re doing the following:

  • You pay for your adult child's needs.  For example: cell phone, car insurance, rent, car payment, student loan or credit card debt.
  • You give your adult child cash for random, unplanned expenses.
  • Your child doesn't know when you will be cutting off your money supply.
  • Your adult child knows you are giving over YOUR means and doesn't volunteer to stop accepting money.
  • Your adult child tells you that all of their friends get money from their parents.
  • You allow your child to live at home – rent free.
  • You are afraid to have a tough money conversation with your adult child.
  • Your adult child spends money needlessly, even though they are taking money from you.
  • You don't understand what you are paying for and exactly how it will help your adult child.
  • Your adult child shows few signs they'd like to be financially independent.

So how many of these are ok?  How many of these should you allow? The Money Couple says, NONE! That’s right – doing any of the above sends the message to your adult child that taking cash from mom and dad is a good plan.

These years are fraught with growing pains for all of you. Many parents are torn between helping too much and not helping enough. They don't like to see their child struggle – even though they may have struggled at that very same age. The Palmers are not saying it's easy for either of you. Starting over after college, making new friends, figuring out how to balance wants and needs, work and social, is difficult. Watching it as a parent often feels even more difficult.

“But growing pains, well, help them grow,” the Palmers said. “This is the ideal time to help your young adult learn to take care of his own finances and make his own money decisions. Help them learn to stand on their own feet and successfully manage their own money. Mistakes will be made, but they will learn from them. Eventually. And you can take heart in knowing you gave them one of the best gifts you can as a parent, healthy independence.

If you’ve been able to cut those financial strings, please share them with the rest of us who haven’t.