Being financially independent in your older years is the best gift you can give your children

One of the most common mistakes that I see clients make is supporting children’s needs over your own. It only natural that you want to help your children but what do you do when your adult child wants (or needs) to move back home?

Here are some tips for dealing with an adult child moving back in without putting your financial security in jeopardy:

• Don’t feel obligated to provide financial support– You should not feel obligated to financially support adult children who move back home. If your adult child is working you should expect your child to contribute to the household (such as paying rent). If your adult child is looking for employment, set a timeline for the child becoming self-sufficient. The main monetary drain that I see parents have experienced has been paying all of the adult child’s expenses including their debt.

• Identify long-term consequences-When I have clients with adult children living at home that are causing a financial drain, I work with them to identify the long term consequences to their financial security. I also help them create strategy to help their adult children transition from financial dependence to self-sufficiency.

• Create a strategy-You should avoid helping children financially to point it will derail your own financial future. It is important for you to set boundaries and create a timeline for the child becoming self-sufficient.

Here are some actions you can take:

• Don’t pull money out of their retirement plans to help children
• Help your adult child set up a budget
• Work with a financial planner to determine how much support, if any, you can provide to your adult child
• Help children plan by paying the cost of your child working with a financial planner to create a long term plan, especially if debt is involved

It is also important not to use or give away assets that you may need down the road or will potentially put your financial security in jeopardy. When it comes to adult children, the best gift you can give them is to be financially independent and not be a burden to them later in life.