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So your kid has graduated from college–amazing news! Congratulations! But there’s a common question we bet is weighing on your mind: for how long should I continue to financially support my adult child after college? It’s a tough question with no clear right or wrong answer. We’ll walk you through some factors to consider as you try to navigate this difficult position.

It depends on your own financial situation.

If helping your adult child financially would potentially derail your own finances, it’s not a good idea to help them out. As much as you want to be generous with your own child and make sure they’re stable and set up for success, you shouldn’t risk your own financial stability to assist them. Make sure your own retirement plans are secure before offering financial assistance to your adult child.

Are you helping or hurting?

Experts say that giving your kids money after college can harm them more than it helps them. In many cases, adult children who have received financial help from their parents become less self-reliant and have decreased self-esteem. A solid financial foundation and a sense of personal responsibility are crucial for adult children being able to succeed on their own–hopefully you’ve instilled them with both.

Be transparent.

If you’ve been helping your adult child with money and are ready to cut off your financial support, they should have ample warning. It should never be abrupt. Provide a warning in advance, discuss your reasoning openly and honestly, help them plan for it, and then make the change.

Make it conditional.

As your adult child gets older, make sure you have rules in place for the instances when you do offer them financial assistance. Conditions can motivate them to make changes in their life. Perhaps they’re seeking some money from mom and dad so they can get their first post-college apartment. Instead of helping them pay their rent, you could offer to let them live at home rent-free, giving them some extra incentive to land a good job that enables them to afford that apartment on their own. Later on down the line, if you’re helping your adult child buy a house and chipping in towards the down payment, is that a gift to them or a loan? If it’s a loan, when do they need to repay it to you? Will there be interest? Talk these things through and get it in writing.

Categories: Financial Planning