Should you give money to your adult children?

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The stereotype of the middle-aged slacker spending hours playing video games in his aging parents’ basement continues to stigmatize adults who receive material help from their parents.

In many cases, stigma can be justified. But life is complicated and so are the family dynamics that go with it. Whether it is healthy or useful for parents to give money to their adult children can only be decided on a case-by-case basis.

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“I believe that for each family, the circumstances will be very different,” said Sam Tabak, founder of Rabbi Meir Baal Haness Charities, which helps families in financial difficulty. “So it’s normally not a good idea to attach a specific age number or monetary value in such a case.”

Are you in a situation that makes you wonder, “Should I give money to my adult child?” »

The answer is that it depends.

Questions to ask yourself before deciding

While it’s natural to give an 18-year-old fresh out of high school more slack than someone in their 30s or 40s, most experts who spoke with GOBankingRates agreed that any adult of any age may experience financial difficulties that require it. lean on their loved ones. Instead of using years on Earth as the determinant, base your decision on the answers to the following questions:

  • Could they do it themselves without undue difficulty if you said “no”?
  • Is it part of an unhealthy addiction pattern that you activate by saying yes?
  • Is their situation the result of circumstances largely beyond their control?
  • What will be the consequences if they do not receive the money?
  • Will it improve their long-term financial situation or is it to satisfy an immediate need or want?
  • Can you afford to do this without compromising your own financial security?

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What is the situation ?

While the details of each case are unique, there are a few general scenarios that would make it difficult for most parents to justify not helping their children if they can.

The first is when giving could prevent a catastrophe.

“Think of an eviction or foreclosure, a medical emergency or the loss or damage to a vehicle when it’s necessary for work,” said Colin Palfrey, CMO of the personal finance management firm . Credible. “Each of these situations can have life-changing consequences and they may be unable to recover for a considerable time.”

Another primary consideration is whether there are any innocent grandchildren who might suffer.

“Parents may have been irresponsible with their finances, but it’s not their kids’ fault,” Palfrey said. “None of us could sit idly by and watch our grandchildren go without adequate food, clothing or shelter. If you lend money under these circumstances, make it clear where it is to be spent and whether it is to be repaid later.

At the other end of the spectrum, there are times when it’s easy to say no, such as unnecessary or frivolous spending.

“Do they want to upgrade to a 65-inch TV, buy a new sports car, or go on an exotic vacation? asked Palfrey. “These are the things we’ve been saving up for – they need to learn to do the same.”

Palfrey also addressed the harsh reality that some cases involve false demands for money that will likely be used to fuel addiction or other destructive behavior.

“You know your kids,” he said. “If the money isn’t going to be used as they say, don’t give in.”

Is it a financial transaction or a helping hand that you are happy to extend?

If you decide to donate, there are two philosophies on how to do this. The first treats it like any other adult financial arrangement with mutually agreed parameters and set expectations.

“Parents are totally fine with providing financial support for their adult children, but everything should be put in writing beforehand,” said Carter Seuthe, CEO of Credit Summit. “Document the amount of money you will provide, how it will be disbursed and when it will end. More than anything, stick to what you say you will do.

The other philosophy says it’s not just another financial transaction, that parents should help their adult children because they’ve decided it’s the right thing to do and they want the do — and act accordingly.

“If you’re going to donate money to support your adult children, do so without obligation,” said Jake Hill, CEO of DebtHammer. “Injecting money into relationships tends to only cause problems, not solve them. If you’re giving money to try to fix a relationship or take control of your adult child, don’t do it. It’s best, at that point, to just say no.

Trust your instincts – Does giving feel good?

The final verdict is that there are no hard and fast rules, but ask yourself this: Would you feel embarrassed or ashamed if people whose opinions you value learned about the situation?

“The key here is to understand your relationship with your child and their financial needs,” said Melanie Hanson, editor of EDI refinancing. “Supporting a responsible, hard-working child as they reach a major financial milestone, such as buying a house, makes much more sense than simply paying for living expenses for your child indefinitely when they show no signs of a sign of trying to be financially responsible or independent.”

It’s not just financial difficulties. Helping adult children pay for their education, for example, could prepare them for a happier and healthier future, as could plant the financial seeds of any worthwhile venture that could pay long-term dividends.

“There are entrepreneurs who have hustled as much as anyone you can imagine,” Tabak said. “Millions of them got off to a good start because their parents helped them build their businesses. On the other hand, it is important to ensure that the child is actively working on his path to financial independence. If the financial help of a parent can facilitate this path for the child, it would be even better. Parents just need to make sure they don’t overspend on adult children with little or no ambition to become financially independent.

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