Cutting Off the Kids

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Mellody Hobson talks about how to let our kids spread their wings and fly financially on today’s “Money Mondays” segment.

According to the Pew Research Center, nearly half of middle-aged adults gave financial support to a grown child last year. Half.  You can blame it on the sluggish economy or the rough job market or say we’ve raised a generation of slackers, but the end result is the same: A lot of would-be empty-nesters are continuing to house their adult children. And if they’re not providing room and board, they’re subsidizing rent or paying for insurance. That’s all fine and well if your child has just hit a rough patch and you can afford to help, but many baby boomers are finding themselves sandwiched between the needs of their aging parents and their grown children, and they can’t take the financial strain. In that case, it’s the kids who need to need to be pushed into financial independence.

How do you suggest approaching that?

In an ideal situation, you have the time and money to set them up for success. Instead of cutting them off cold turkey, experts agree it’s best to give them a few months notice. One way to help them transition is to offer to match any money they save up to whatever amount you deem appropriate. With this method, you ease your child into self-sufficiency incrementally. For instance, if they live at home, begin charging a modest rent before simply giving them an eviction notice.

So how do you have “The Talk?

Plan what you’re going to say and then just cut to the chase. Be direct and honest. If you need to focus on your retirement, share that with your child. Let them know that you were happy to help while you could (or while you were willing, if you’ve simply decided it’s time to let them sink or swim). And to that point, a little tough love can go a long way. It might be hard to stomach as a parent, but you may need to watch your child try and fail a little to learn some valuable life lessons. Too much support for too long can be a disservice to you both.

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