Are There Specific Guidelines?
Are there specific guidelines or rules on funding a young adult? The short answer is “no.” In this article, I will share my views, but each parent has to grapple with what, when, and how to fund a young adult if at all. Parents try to do what they think is best, and we should not denigrate a parent if we don’t agree with their decision – it’s personal. My recommended starting point for not just this subject but others related to parenting is to start with love. We need to ask ourselves if we are funding out of love or motivated by fear, frustration, intimidation, guilt, or other types of emotions. Acting out of love does not mean we fund in all cases. Love also needs to be tempered by the perspective of doing what is right. In this regard, we have to ask ourselves, is this the right action to support the young adult’s responsible, independent development? Will this help them become more independent or foster greater dependence and further requests for help?
Another consideration is to expect the young person to demonstrate initiative or share in the responsibility to meet their financial need. My rule of thumb is not to do something for a young adult that they can do for themselves. If you do help, expect them to meet you halfway. For instance, to come up with a match for the funds you offer. You can also offer some seed funding to help them move forward to find an apartment or obtain a job. A final guideline I use is to consider the financial health of the parents. If parents do not have income or savings to support the young adult, they need to say “no” and not feel guilty. Unfortunately, one study found that forty percent of parents of young adults incurred additional debt to help their young adult. Risking more debt or one’s retirement savings to support a young adult except in unusual circumstances such as a significant health crisis is not helpful. According to the same Merrill Lynch study referenced above, parents spend double what they save for retirement- $500 billion – to support their 18-35-year-old. We need to remind ourselves that the lack of parental subsidy and becoming a successful independent young adult are not mutually exclusive.
What to Fund?
In working with parents who are able and willing to help their young adults, the most common funding options for 18-26 are housing, food, health,/dental insurance, car insurance, transportation, education, and cell phone costs. Most parents will have a rule that if the young adult is in school and living at home, they do not have to pay room and board. If they are not in school and living at home, paying rent, and helping with household costs and responsibilities is reasonable. I encourage parents to collect rent but put it in a savings account and use it to help your young adult move out by covering a security deposit and possibly a few months’ rent. As the child moves to later adulthood- 26 and beyond- the parent should have higher expectations of financial independence. At this stage, parents who have the means to help may fund wedding costs or help with a down payment on a house. Such a one-time contribution to future family success could be helpful, but any ongoing subsidy likely is not. At this later stage, decisions of funding need to focus more on how such actions will foster greater independence.
Saying “No” to Your Young Adult
Saying “no” can be empowering. It’s an expression of your confidence in our young adult’s ability to make it on their own. We have to exhibit love and backbone when our young adult children are irresponsible or unsafe. Were we unloving when we took matches away from your toddler? Are we unloving to refuse money for illicit drugs or use of a car if our son or daughter is under the influence? There are instances where parents may need to take a softer or more gradual approach to the support of an adult child. Mental health concerns, physical or mental disabilities that may lead parents to extend a caretaking role. Even in these situations, parents and young adults should utilize state and local services that foster as much independence as possible. Although young adults with disabilities do want to be independent, they and their parents are often apprehensive and anxious about the letting go process.
In conclusion, follow guidelines as stated above or develop your own based on love and helping the young person move toward responsible independence and stick to these. Consider the stage of their young adulthood and their needs that will be different for an eighteen-year-old versus a twenty-eight-year-old. For parents, this time of life can be very challenging, with no easy answers and no shortage of anxiety, guilt, and frustration. This, too, shall pass, your young adult will become more independent, and your relationship with them will improve. In the meantime, be loving, be strong, be persistent.