Should I sacrifice my own wealth to support my adult children?
14 November 18  /  Insights

Most parents will say that they want to help their children as much as they can and give them every advantage in having a bright and successful future. But at what expense does this come of parents’ wealth, savings and investments?

Can you afford to press pause on your own financial plan?

Some parents who are still supporting adult children rationalise the expense by telling themselves they’re “just pausing” their own financial plans and can get it back on track. This is especially common of parents who want to help with a major life transition such as university fees, buying a first home, a first car, or a wedding.

However, while your adult child can apply for scholarships, sign a lease, have a loan, or take out a mortgage, there are is no help for returning your wealth once it is spent. If supporting an adult child causes you to slip below your baseline budgetary needs or savings goals, it can be difficult to catch up later on.

What should you do if supporting your adult children is negatively affecting your own finances?

  • Openly discuss finances with your children – By opening up a conversation, they won’t be afraid to come to you when they have a financial problem or need a push in the right direction.

  • Know their budget – If you are lending your children money, you have a right to ask them what it is for and what they have spent their own money on. By getting a sense for their spending, you might be able to help your child find ways to economise, which could help limit your own expenses. Perhaps you could suggest setting up a monthly budget plan with them.

  • Set terms – Much like asking to understand your child’s spending, hammering out an agreement strikes some parents as intrusive or even cruel. But it’s important that you and your child both understand each other’s expectations going forward. For starters, are you giving your child a gift or a loan? If it is to be paid back? Is there interest or a deadline?

  • Don’t be afraid to say no – Possibly one of the hardest things to say to your children is ‘no’. If you look at your child’s budget and the intended use of your money, and decide a loan or gift is not in your child’s best interest, or could potentially damage your own finances, then saying no is an option. There are more ways to help a child than writing a cheque. Maybe you have a connection who could help your child find a better job or offer to go with your child to the bank and help with loan applications.

Learning to manage your own finances can be one of the biggest – and toughest – life lessons that your adult children must learn. Sometimes, this has to be the hard way.

Whatever you decide to do, whether you continue to offer financial support or not, it is important that you organise your own finances for having children. It is better to prepare than repair.

As your Lifestyle Financial Planner, we can incorporate your children and ‘what if’ scenarios into your Lifestyle Financial Plan, giving you an idea of the long-term effects.

Speak to us today on 01865 208012 or email