Entering the Real World
As you raise your children, your goal is for them to fly on their own at some point. The question is when should you financially wean off your children? At what age should they be able to live independently?
During their teenage years, children’s activities become more expensive due to the cost of electronic gadgets, cars and experiences. You may give them an allowance. Or they may have a job to earn spending money. Either way these are the years when they should be learning about how to be responsible with money.
Over the years, you see their dependence on you as parents change in some ways. It is important to start early, letting them take over some of their financial responsibilities. This can be gradual, but they need to start learning how to swim, or they’ll sink later.
As teenagers, this may come in the form of buying their own gas or coming up with their own spending money. During these years, this responsibly builds confidence and teaches them the “value of a dollar.” They will learn that it takes hard work, persistence and time to earn money. This needs to be seen and felt by the child. Children need to realize that if they don’t have money, they can’t do the things that money allows. It is simply cause and effect. “Because I have a job and earn money, I can do X.” These are the years when they should be taught to be prudent with spending and overall good stewards.
After they graduate high school, they typically either they get a job or continue their education somehow. Most often they are still financially dependent through their college years. You will likely continue to support them until they are on their feet, somewhat.
Don’t baby your young adult child. Let them fail. Let them take responsibility. They need a sense of the real world. We don’t all get participation trophies. We learn from our failures. We take pride in our accomplishments. We get a sense of gratitude when we earn something.
A Little Push
So, back to the question of when do you cut your children off financially? I personally believe they need to begin learning financial responsibility, and some independence, during high school. This means a job! Let them take over some of their financial obligations. During high school, they should, at least, be paying for their own entertainment and leisure activities. While in college, I believe it is also good for them to be paying for their own gas and cell phone bill.
Line in the Sand
So, what about after the formal education ends?
Layout a timeline. Calmly discuss this with them so that both you and your child have a clear understanding of what you expect. Clearly defined boundaries are very healthy!
Here’s the timeline for weaning your kids off the “parental payroll”:
- Six Months – They should have a job within six months after their formal education ends. If they are living at home, this is when they should start paying you rent. The rent can be a modest amount, but they must know that they do not get a free ride. This is important!
- Twelve months – By twelve months after their education ends, they pay for all their living expenses. All of them!
- Twenty-four months – It is time to leave the nest. It is not healthy for the parents – or for the child – for children to continue to live at home past their mid-20s.
Your child has recently married. They have one child and another on the way. They have two nice cars, with loans. They have a couple of lingering credit card balances. They approach you to borrow money because they are in a cash crunch. You know you probably will not get the money back but you lend it anyway. A few months later you find out they are going on a cruise and still attend most college football games. Nine months later they need to borrow more money. What do you do?
This is tough! You see them struggling and, as a parent, you don’t want them to be in this situation. The default reaction for many parents is to get the checkbook out and give them what they need. However, it seems to be a cycle. When they are bailed out, they are not able to grow.
(Read this recent blog post.)
Loans Before Gifts
First, don’t give them money when you see them struggling or when they ask for money. This sounds really harsh and cold. But they need to grow on their own. It’s OK to lend them money, but have them sign a promissory note, with clearly defined terms. Force them to stick to the agreement.
This does not mean that you should never give your children money. They must learn not to be dependent on you first. Going through financially tough times is an opportunity to learn. I believe it is an opportunity for God to help us grow and mature into who He wants us to be. Do not get in the way of that growth.
You’ve probably taught them well up to this point, so let them continue to grow. If you are still controlling their lives or just being a crutch in their mid-20s or later, they are not growing.
Let go. Let them grow!