Do your adult kids really need your money?

Our 23-year-old daughter, Lindsay, called one morning. “I just came out of my apartment, and my car is on cinder blocks!” she exclaimed. “All four tires are gone – stolen! I don’t know what to do.”

Though she was living on her own nearly 1,600 kilometres away, her dad and I were her first responders. Together we sorted out what to do, including how to tow a car without wheels. Within a few hours, we’d helped her through the challenge and loaned her money for new tires.

We assumed our three adult children would be financially independent after college, but that didn’t mean they wouldn’t encounter financial trouble and need our help. Parents of young adults enter a new season as their kids begin careers and face an insecure and financially demanding present.

Young adults are looking for jobs and places to live while paying back student loans or trying to finance further education or buy a car. The cost of living has risen while starting wages may not have. Many kids discover that their first paycheque from a real job seems large – until they start paying their bills. It’s a season when unexpected expenses, such as four new tires, can derail a fragile budget.

As parents, we will at one time or another encounter a situation in which our young adult kids will need financial help from us. When they do, what is the best way to respond?

New priorities

We all want to help our children because loving them well means helping them. But before we help, we need to consider the priorities of this season. In this final stretch of parenting, our goal is to finish launching responsible adults by equipping them to cope on their own. We are also making an important shift from our parent-child relationship to an adult-to-adult friendship, which means walking alongside rather than leading and controlling. And as our kids gain independence, we need to protect our own financial futures, too.

In light of these priorities, we need to ask ourselves three questions about when and how to offer financial help. By helping them financially, will this:

• Empower my children – or will it enable them?
• Move us closer to an adult-to-adult friendship or back to a dependent relationship?
• Jeopardize our financial future?

In past years, we often sacrificed our needs for our children’s needs. With adult children, we shouldn’t sacrifice our financial security as we age. I have a friend, a single mother, who wants to help her daughter, but simply can’t without giving up her own insurance payments and cutting into her living expenses. Helping financially is not a good decision for her. It won’t empower her children or move them closer to a friendship, and it will jeopardize her finances.

When to offer financial help

Making the decision to help or not help an adult child takes courage. This decision should not be an emotional response. Offer financial help when:

Rewarding maturity

If our goal is to raise responsible adults, we seek to empower them with opportunities to manage a loan and follow through on their agreements. But we enable their irresponsibility if we continue to give or loan money while they mismanage it. We become their obstacle to learning from the consequences of their own choices. So we must check our motives when considering how to help our kids – to be sure we’re not buying their continued dependence, which gives us some control of their choices.

Supporting a worthy need

Money needed for further education, health care or an emergency is a worthy need that furthers our kids’ goals and our goals for them. Debt frivolously accumulated on a credit card or rent money needed because of overspending on a trip to Las Vegas is not a worthy need.

When you and your spouse both agree

If married, parents should help only when they agree on how to help. I wanted to bring our children home for Thanksgiving, even though they were coming home for Christmas. My husband disagreed, and after a couple of conversations, we reached the mutual decision not to offer plane tickets.

The best kind of financial help

As parents, we are often challenged to match our adult children’s unique needs with our available resources, which means getting creative. The best kind of help is:

Help that is easy to offer

Many parents don’t have the resources to make cash loans, but they may have an empty bedroom, so allowing their child to move back home can be a generous offer. Any financial expectations need to be clarified and the arrangement clearly identified as temporary because the goal is to help them cope on their own.

Help that makes financial sense

Some parents keep their young adults on their family phone plan because the costs are cheaper on a family plan. Parents must decide, however, whether this is a gift or whether the child pays his share of the bill.

Help that’s negotiated

We honour the emerging adult-to-adult relationship when we clearly discuss the options available. A father met with his son about his need for transportation. After discussing the issue, they decided on a loan to help him get a car. The son favoured leasing, while the dad recommended buying. The son decided to lease. Months later, he confessed that buying would have been better, but he was grateful he had the freedom to make the decision – and the mistake – himself.

Help that continues to shape them

Many parents agree to help their children but want them to learn something about adult responsibilities in the process. For instance, one couple wanted to gift their recently married daughter money for a down payment on a house. Their daughter and her husband had begun saving for this investment, so the parents matched their savings, telling them they wanted to honour the importance of a savings plan.

Another couple lent their daughter money monthly for living expenses while she was in medical school. Following graduation, she started to repay the loan. The parents accepted half the money and forgave the remaining debt as a gift, telling her they wanted her to experience both the pinching reality of repaying a loan and the blessing of a forgiven debt.

How to offer help

Clear communication matters. That means ironing out the details to make sure everyone understands the expectations of the help offered.

Is the help a gift or a loan? A financial gift has no strings attached; it is simply given and received, usually with no restrictions about how the money will be spent. A loan has strings attached, which you need to clearly define and communicate. If it is a loan, you will need to consider the following:

• Is it interest free?
• Will there be a payback date?
• What happens if your child doesn’t repay?

Before offering a loan, you may need to face the possibility that your child might never be able to pay back the money. How will you handle that? (This problem can ruin relationships.)

As for co-signing on a loan, the Bible warns against taking on that liability (Proverbs 22:26-27) because it can ruin you financially.

Keep in mind that offering one child financial assistance doesn’t mean you must treat each child equally. Promising equal treatment can turn children into watchful scorekeepers who become resentful if everyone doesn’t receive the same things. Though equal treatment sounds good, the reality is that different circumstances require different responses.

When to stay out of their money issues

Sometimes adult children need professional help beyond our abilities, and they will not seek that help until we get out of their way. Though choosing head-over-heart responses are painful, refusing to offer financial assistance may be the most loving, helpful choice we can make.

Carol Kuykendall is a sought-after speaker and the author of the book Give Them Wings: Preparing for the time your teen leaves home.