For most parents, financial decisions begin before their children are even born, and they continue to surface throughout childhood, and often through college. However, when it comes to the common financial stresses that individuals face once their kids are grown up, society tends to fall silent. In the New York Times, Hannah Seligson addresses this common source of stress, and says it’s time we start talking about it.
“More than half (53 percent) of Americans ages 21 to 37 have received some form of financial assistance from a parent, guardian or family member since turning 21,” Seligson writes, citing a 2018 report by Country Financial, a financial services firm in Bloomington. “This may include paying bills for a cellphone (41 percent), groceries and gas (32 percent), rent (40 percent), or health insurance (32 percent).”
And the burden isn’t only felt by parents. Many adult children in their 20s and 30s feel guilty about being on the receiving end of their parents’ help. In a recent Harper’s Bazaar feature, Jen Doll discusses the reality that most millennials feel distressed due to a sense of dependence on their parents — and while the dependence is common, most prefer to act like it doesn’t exist. “The parents can feel burdened by the strain of financial giving, and the adult child can feel burdened by the emotional strain of receiving,” Carl Pickhardt, Ph.D., parenting expert and author of Who Stole My Child, tells Thrive.
If family financial stress is taking a toll on your well-being, it’s time to address the issue, and streamline communication. Here’s where you can start.
If you’re the parent…
Establish clear rules
“One tip for parents is to establish rules in terms of what they will and will not provide,” Jessica Troilo, Ph.D., Associate Professor of Child Development and Family Studies at West Virginia University tells Thrive. “What expenses will be paid for by parents? Will these be paid back? If yes, in what time frame? What will happen if the loans can’t be paid back in time?” Troilo says maintaining clarity in ground rules is key, and without it, the stress of the piling costs can feel endless — which can in turn affect the family bond. “To avoid conflict, both parents and children need to understand what’s expected of the other,” she says.
Get a professional opinion
Having access to a financial planner is a luxury that not everyone has, but Troilo points out that if possible, seeking help from a professional can help when it comes to managing the strain of familial costs. “If it’s an option, discussing your options with a financial planner can be helpful,” she urges. “Aside from the mental benefits, it helps ensure that your retirement and later life planning stays on track.”
If you’re the child…
Create a timeline
As Seligson notes, it’s common for adult children to need financial assistance from their parents well into their thirties — but if you’re on the receiving end, it can still cause guilt. Troilo suggests mapping out your own finances, and your path to self-sufficiency, on a realistic timeline, as it can help you eventually feel good about standing on your own feet. “Have a plan in mind for the future,” she suggests. “Write down your financial goals regarding your future, and decide what short, medium, and long-term steps you have to take to reach those goals.”
Consider the nature of your agreement
While most parents are the ones that dictate the terms of their financial assistance, Pickhardt suggests for the adult children to consider how the process is affecting their mental well-being, and make changes if necessary. “An important consideration is whether the financial assistance is freely given or is a loan,” he says. You should then identify which one would cause you less guilt. “Often by loaning, one adds a creditor/debtor tension to the relationship,” Pickhardt notes. If that feels stressful for you, then you may prefer a gift. But he notes that others will feel much better about a payment plan, and find a gift far too stressful. Choose the option that’s right for you.
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