When to take the Adult Kids off the Payroll

Nov 1 • Financial Planning, Life Planning • 203 Views • No Comments on When to take the Adult Kids off the Payroll

By Jamie Bosse

When reporters asked actor Jackie Chan why he has chosen to give all his wealth to charity instead of passing it on to his only son, they were expecting a great news story – a juicy family controversy, family secrets revealed, etc.  Instead, Jackie simply said, “If he is capable, he can make his own money, if he’s not, then he will just be wasting my money.”

According to Business Insider, nearly a third of 30-somethings and more than a fifth of those in their early 40s receive “significant, ongoing” financial support from their parents.  What are we doing wrong?  Levels of support vary from simply allowing the young adult to live in our houses (or a house that we own) rent free, paying for insurance, cell phone bills, buying cars and even groceries.  We all want the best for our children and we want them to have a “better life than we did.”  Most of all, we hate to see them struggle or suffer, so we swoop in to help however we can.  The result of keeping these adult kids on the payroll is that they never learn what life actually costs.   They think that they can easily survive on a part-time barista salary and stop striving to be better.  Think about it – if you don’t have to pay rent, utilities, phone bills, car payments, groceries, or gas, what do you pay for?  Beer?  Entertainment?  Designer sunglasses?

In my opinion, a little bit of “suffering” is a good thing.  College kids should live on Ramen noodles and mac and cheese – it’s a rite of passage and something that they will appreciate and joke about later in life.  If your child makes $30,000 a year, then they need to experience the life of someone who makes $30,000 per year.  They will continue to work hard to grow their income and learn the value of a dollar.  If you never have to work hard to get what you want, then why would you work at all?  Think of the pride you have when you finally purchase something that you have wanted for a long time, or when you’ve finally saved enough for that vacation you want to take.  It is very satisfying to reach a financial goal – don’t steal that experience from your kids.

If you are currently supporting your adult children, I am not recommending that you stop cold turkey.  Work out a plan with them and stick to it.  Ease into it by making them go to the grocery store with you and pay for a 3rd of the bill with their own money.  Next, kick them off the cell phone family plan.  Start slowly and make a plan to get them completely off the payroll in a set amount of time.  If you own the car that they drive and have them on your auto insurance plan, you may be subjecting yourself to undue risk.  If Junior gets in an expensive accident, the lawyers will come after YOUR assets, not theirs.  Chances are, your children have no clue how much you pay for these items, and so making them aware is the first step.

Being financially prudent is a skill that will benefit them for a lifetime, and perhaps beyond.  When they ask for financial assistance, instead of reaching for the checkbook, take advantage of a learning opportunity.  If you really want to help them out financially, buy them a session with a financial planner instead of giving them cash outright.

For help communicating about this and other financial issues, schedule a meeting by clicking below, contact Jamie Bosse –jbosse@makinglifecount.com, or call (913) 345-1881.

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