Clear signs it’s time to cut ties with your adult children financially

Millennials have found a way to buy a home: live with mom and dad

Approximately one-third of young people (18 to 34 years old) live with their parents. And here’s the kicker. According to Pew, “the majority (64%) of young people who live with their parents say this arrangement has had a positive impact on their personal financial situation.”

But this was quite surprising. The vast majority of young people (69 percent) said their parents’ level of involvement in their daily lives was about the level they wanted, while 22 percent said their parents were not. Fully involved. Only 9% said parents were too involved.

It’s hard to know when you’re in a state that enables or inhibits your behavior. The ability of adult children to evolve into economically responsible citizens.

In a recent online discussion, Tracy S. Williams, a licensed clinical psychologist and certified financial therapist, joined me to answer reader questions about money and mental health. Here are our answers to the questions we couldn’t answer about youth support because we didn’t have time.

How America’s youth are navigating today’s economy and finding financial solutions

question: Do you both have any suggestions for hosting adult children at home and supporting them instead of enabling them? And when is it time to leave the nest?

Williams: There are certainly advantages and disadvantages to having adult children living at home. Parents often wonder where to draw the line when it comes to providing for them financially.

Financial possibilities arise when you can’t say no to giving money to your loved ones, especially when they can support themselves.

To avoid financial strain, it’s best to have family discussions to set house rules, outline family roles, and assign financial responsibilities. This initial conversation should be followed up with occasional check-ins to ensure the systems the family has put in place are running smoothly.

When they leave home depends on several factors. We encourage you to have an open dialogue with each other about this, share your hopes, and work together.

My view: There are three young people (all in their 20s) living in the house, and I have a lot of experience with this problem.

Here we will show you how to create a situation in which you support young people, rather than supporting them.

• Make sure they have SMART goals (specific, measurable, achievable, relevant, and time-based plans). Are they living at home to pay off student loans? If so, you need to develop a reasonable plan for eventual financial independence.
• There are rules. For example, in our house, everyone cooks at night. Even if you go out, you must prepare dinner. This is a home, not a hotel, so everyone has to pay their fair share.
• Any advice would be greatly appreciated. I love it when kids come to me for input on specific expenses. According to Pew, most young adults (68%) look to their parents for financial advice.
• We will continue to cover some expenses to help them save money. For example, my husband and I don’t charge our kids rent because we save most of our paychecks or invest them in our retirement funds. That was the deal. As long as they save as promised, they won’t charge you rent. Rent will be charged if any irregularities occur.
• We can ask you money-related questions within reason. We need to see what evidence they have preserved.I’ll be sure to check They achieve the goals they set in exchange for free rent. Trust, but verify.
• We are constantly checking to make sure they are on track. When our kids think we’re doing too much, they tell us so. And we retreat.
• Learning good money management is important for young adults, but it doesn’t have to come at the expense of spending your 20s building a household you can barely afford, even with a roommate.

Young people suffer from anxiety and depression twice as often as teenagers

This is the time to help your adult child cross the line into overindulgence, and it’s time to cut the cord.

• When there is no economic growth, it is spoiled. It’s overprotective if your adult child is eating out all the time, planning a trip to Mexico for spring break, and can’t find the money to pay for their own car insurance.
• Let’s say your son lives at home or you’re paying for him so he can aggressively pay off his student loans. You’re watching for payoffs – and you should be – but you’re seeing little progress as he overspends on entertainment and eating out. It becomes possible.

For more timeless personal finance advice, order Michelle Singletary’s Money Milestones.

• According to the Pew survey, 49% of low-income parents who helped their children financially in the past year said their finances suffered at least some amount of damage. If helping your adult child comes at the expense of your financial well-being, that’s not good. Understood. We want to help kids who may be struggling with student loans or high rent. But if you indulge them for too long at the expense of your financial security, the burden may eventually shift to them.
• When your adult children spend all their paychecks on all their playdates, they are encouraging the development of bad financial habits. If you leave your financial umbilical cord in place and end up with overindulgent adults treating you like their own personal ATM, you need to cut that cord.