When to Declare Enough With Kids and Finances


As parents, we all want our kids to grow up financially independent and ideally learn from the mistakes we already made. Human nature being what it is, sometimes that’s realistic, and often, it’s just not.

So what can you do, as a parent, to draw that line in the sand and send the chickadees out into the world to see for themselves that your intentions were solid, even if you know they’re not going to remember those lessons?

Understanding Economics

First, it’s important to understand the current economic environment for young people. Many of us try to start our children off with simple budgeting tips – the tried and true piggy bank, the after school job and at some point, either a credit card that’s part of our accounts or perhaps a prepaid debit card. But what happens when you’ve done all of that, your kids are reasonably responsible, they’ve graduated college and suddenly, they’re back home, setting up camp in their childhood bedrooms? Think it can’t happen? Think again.

New Poll

A new “60 Minutes” and Vanity Fair poll shows that more than half, 54 percent to be exact, of parents say there should be no set timeframe that kids should set up their own housekeeping away from the nest. That’s good, actually, considering 40% of adult children between the ages of 18 and 39 either still live at home or have returned home after being on their own to live with their parents again. Not even kids who have their college education, not even when the kids have kids of their own, do some parents believe symbolizes an exit strategy. Even newlyweds are living with inlaws – even when the newlyweds earn more than than the parents or parents in law – many still return home. So why the sudden trend?

More importantly, why are parents allowing it to happen? Those who do have adult children at home – more than a quarter of them say they take on debt to help support these grown folks. Even seven percent say they’ve been forced to delay their own retirements. While parents might not have raised their children to return home or worse, to never even leave home, there’s no denying the the complex dynamics at work.

So, knowing full well that any of us could someday be one of those parents, we turned to the experts for a bit of advice on how to get the financial ball rolling with the little ones – before, of course, they head out for college.

The experts agree that kids should begin earning their own spending money early on. A few household chores is always a great place to start. It gives them a sense of pride knowing they’ve earned a few dollars for cleaning out mom’s car or helping dad clean the garage.

American Institute of CPAs

There’s another survey, this one from the American Institute of CPAs that says the majority of American kids still receive allowances. On average, they’re about $15 a week. The problem is, these kids aren’t saving any of it nor is mom or dad forcing them to or at least explaining to them the value and peace of mind knowing there’s a rainy day fund. In fact, less than 1 percent of parents encourage their children to save. Adding to the situation is nearly all parents – 90% of them – are covering those extras that kids want, like designer clothes, handbags, cars and other material things. Family finance expert Ellie Kay says,

As parents, we owe our children food, clothing, health care and shelter, not fun with friends, cellphones with data plans, a car or a party-school college experience. If kids want those things, they need to earn it for themselves. Otherwise, they feel entitled instead of appreciative.

That brings us back around to the adult children who are at home.

Why is this still such a prevalent fact in today’s American society? That answer is actually easy: there are no jobs for graduating high school or college seniors. Parents dream of the day their young adults leave the nest in search of their college education, which paves the way to great successes in their own adult lives. It never occurs to anyone that the job market’s going to be troubled when graduation comes. Everyone just assumes they’ll transition right into their career choice. It’s just not happening, say financial planners.

There’s a difference in kids who are simply irresponsible and were evicted because they were three months behind on rent and those kids who have played by the rules and had big plans after graduation. Those who have those ribbons of responsibility woven into them will not take advantage of the benefits of living at home and will instead be the first ones out of the door each morning pounding the pavement.

These are the kids who will take part time jobs to cover their car payments and credit card debt so that their parents don’t have to,

said the 60 Minutes report.


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