Cutting The Financial Cord

Dear Christine,

I have a job and my own place, but I'm still pretty financially dependent on my parents. My mother especially makes sure that I get to live this great lifestyle in the big city. Thing is, I'm not at all sure my parents can actually afford to keep supporting me the way they do. Every time I try to have a conversation with them they just say not to worry about it and then deposit money as usual. I really enjoy having the lifestyle I do, but I'm starting to feel really guilty about what kind of affect it's really having on my parents. What do I do?

~Financially Loved but Guilty, New York, 25

Dear Financially Loved but Guilty,

First of all, I commend you for having some guilt about this situation. At least you are aware that your Paris Hilton arrangement may be a strain on your parents. Many Gen Y'ers use mom and dad's credit card as if it's their birth right. But now it's time to move out of guilt, a reactive feeling that simply helps justify your position, and into action!

Yes, the great life in the big city is fun, but how much are those delicious dinners and beautiful new outfits really costing you? You are 25, you have a job, and you are living on your own so it sounds like the extra dough your parents are giving you is just "fun money." Hey, there is nothing wrong with getting fun money from time to time. My dad still gets great joy out of handing me a hundred dollar bill every now and then when I visit. But regular deposits? That is financial dependence. By becoming dependent on that monthly deposit from mom and dad, you will never figure out what you can and cannot afford on your own. So YOU are going to have to be the one to cut the proverbial cord.

Today's parents often strive for a relationship with their twenty-something children that is more like friendship than parenting. However, this is a double-edged sword. If they over-support you emotionally and financially, it becomes a crutch for both the parents and the children. Parents get to continue having an active part in their adult children's lives, many times at financial risk to themselves, while the young adults remain tethered to and stifled by the support of their parents.

If you are right, and the money in your parents' checkbooks is running out, prepare yourself for this eventuality - and the reality that you are a grown up. Don't delude yourself about the lifestyle you can actually afford, otherwise you'll end up in debt to maintain that illusion. Being clear about your finances now will help keep your feet on the ground as you climb the workplace ladder and your financial responsibilities grow.

It's clear your parents love you and want to support you in any way they can, and to return that love and support, it's time for you to be independent. Take the expert advice of Neale S. Godfrey, founder of Children's Financial Network, Inc. and author of numerous books including Money Doesn't Grow On Trees: A Parent's Guide to Raising Financially Responsible Children. Neale advises "Come clean with your parents and say that you are really seeking independence and need their help to do so. Design a budget, review it with your parents, and let them feel empowered, not guilty, about helping you to leave the nest." Start prioritizing the activities and expenses in your life. What are the necessities? What are the extras? By creating an action plan with a budget, you are taking a giant step towards becoming a fully independent adult, and will be helping your parents in the process.

As the pressures of the real world surround you, it is so easy to slip back into the role of the child when your parents took care of the bills and eased your mind of worries. But a large part of growing up is taking responsibility for your own life. It's time to cut the purse strings.

-Christine

Please send me your questions by posting them in the comments section below. You can also email me at [e-mail]

Comments

[farleft]

Hi,

I highly recommend stashing that dough in an account that will pay interest. Do you know how much it costs to buy a house someday? Your parents may also need that money back if one of them has a stroke or is otherwise unable to work. The ability to save money is beginning to separate our society into the "haves" and the "have nots"--I'm not kidding, start saving ASAP, something will happen soon enough! Try to live as if they gave you nothing.

Steve

[rigveda]

New York City has become overpopulated by these Gen-Y trust fund losers - one of the reasons that Manhattan is so over priced now.

Grow up already!! If you are in your mid-20's and can't support yourself, there's something seriously wrong with you.

[desertdweller]

Jerry Garcia once said "you ain't no where 'til you can pay your own way back." I have no problem with twenty-somethings having their lifestyles sudsidized by the 'rents. But they need to be reminded that their "cool" has been bought and paid for by someone else. So maybe they are not as "hip" as they appear.

[TedB]

Cut the financial strings. Living within your means is liberating.

[ORSunshine]

I don't get this phenomenon. My parents are BOTH so proud of my brother and I for being financially independent. Not that my parents could really afford to help us out much anyway, but still: The fact that their 20-something children are grown up and out of the house and on their own and successful is a major bragging right for my parents. My mom especially is surrounded by families with children who are the same age as I, but who haven't been able to get up on their own two legs and stride away from their parents. Instead, many parents in their 50s and 60s are financially supporting their 20-something children. I couldn't stand to be that way. But I got an early taste of the responsibility as my parent's paid for my car insurance and nothing else while I was in college. It was clearly established, early, that once I was in college, I was on my own.

[Hattie]

My adult children can't afford to live without our financial help. We are reasonably affluent and don't have a fancy way of life ourselves, so the money is not all that important to us whereas for them it is essential. They don't feel guilty about this, and why should they? They have chosen useful but poorly paid work as teachers, and I'm proud of what they do. They have children, too, so we're helping to support not just them but our grandkids. I can't think of a better use for our money.

[ENK727]

My in laws have the means to give some money each year to their kids and grandchildren. We appreciate every bit they have given us. It certainly has helped ligthen the financial burden at times even though we both work. My in laws also have helped pay for braces and college for their grandchildren. We are all EXTREMELY grateful for their help. If people have the means to do it and can afford to help their kids and grandchildren out, why not. If you can't, then you just can't.

[bobsmith]

You say you're reasonably affluent. So am I. And the REASON I'm affluent is because I didn't receive financial support from my parents when my wife and I were young and raising a family. I, too, had a relatively low paying job in education. But we learned to make do with what we had, scrape, save, invest, and use our creativity to build a better life.

We're old now, and in retrospect I'm very glad that my parents didn't support us when we were young. It probably would have short-circuited our creativity and increased the odds that we'd settle into a mediocre mode. The trials and tribulations of life build strength and character. To deny one's kids the experience of making it on their own is a big mistake.

[mredder4]

I recently just took a step like this, by finally turning down my mom's offers to pick me up groceries when her and my dad go food shopping. Yes, it's been a financial twist, and I still don't have it figured out the way I would like, but not feeling like a drain on my parents is a big boost to my self. Beginning to feel financially independent is well worth the days when I find myself short on cash and decide to read a book instead of going to the bar or movies, or other resource-draining activities.

Eventually, everyone has to grow up.

[bobsmith]

Good for you. You're doing the right thing.

[Stefano]

Your too kind. Even though this kid has a healthy guilt about it, my advise would be simpler, grow up. Your 25, let your parents off the hook and have their own lives. I live in NYC and trust me, the "natives" make fun of "Trustafarians". How someone could take money from their parents to support their cosmo habit while mom and dad struggle is beyond me. Shwo them love and leave their wallet alone. Gen Y can't be that selfish.

[nodano]

I am the same age as the letter writer and I would be ashamed of mooching off my parents to live the "great big city life". It's one thing if you're struggling and need some help in the short-term. It's another if you're using your parents' money to buy clothes and handbags, especially if you think they can't afford it.

I agree - grow up!