I’m a high school senior and I’m going to college next fall. When I go to college, I want to be completely independent, paying my own bills. My parents insist that this is financial suicide and that they should support me through college. What do you think is the right way to go?

Shortly after my eighteenth birthday, I left my parents’ house and went to college. When I left, there was a pretty implicit understanding that I would not be moving back in with them in the future. Sure, while I was a student, I could spend between-semester breaks living there and I could live there in short spurts after college if necessary to facilitate moving on to somewhere else, but my parents’ home was no longer my own. It was up to me to find my own way in the world.

This flies squarely in the face of many parenting trends today in which children often live with their parents throughout college and afterwards, sometimes for many years. The reasons are many, usually revolving around the child’s inability to earn a sufficient income to be financially independent.

Even when children reach a point of “independence,” meaning they don’t live at home, many parents still provide some sort of regular financial support, just to help the children make ends meet.

My belief is that I learned much more valuable lessons by having to make it in the real world than I ever would have back under my parents’ roof. Yes, even if that means a very low standard of living during one’s twenties if necessary.

I’m not saying that parents shouldn’t help if a child completely loses everything. However, there’s a big difference between a helping hand and long term support of a lifestyle.

Short term help in a problematic situation is great – it’s the type of thing that strong relationships are made of. The ability to rely on someone else for a short while when life has knocked your feet out from under you is a tremendous boon and I absolutely do not begrudge parents for helping out in those situations.

The problem comes when that help progresses into expectation and reliance. Any situation in which an individual is unable to be independent and is reliant on someone else is dangerous to both parties. It hurts the parent by taking money away from their future plans, ensuring that they’ll be in the workplace longer and will have fewer assets to rely on late in life. It hurts the child by denying them the skills they need to survive in a world that will eventually not include the parents. Plus, it extends the inevitable ending of support to a later date when it’s quite likely to be much more uncomfortable for both parties.

Yes, financial support of one’s children in adulthood makes life “easier” for them in the short term, but it makes life harder for them in the long term. Such support stunts the budgeting and money management skills that they’ll need to survive when they actually do become independent. It also encourages the establishment of a pattern of spending that exceeds their real income.

The real danger, though, is how it impacts you. The money given to your children when they should be independent is money that’s not going to support your retirement. You’ll have to work longer – and if you’re unable to, you’re much more likely to become a late-life burden to your children than you would be if you invested in your retirement now.

I’ve witnessed this phenomenon with my own eyes. My grandmother gave tons of support to her children, even in their adulthood, and during her final years, she barely had enough money to keep the power on and wound up having to fully support one of her children. If she had completely cut the cord when the children entered adulthood, she would have been able to enjoy a financially comfortable retirement – instead, her final years were fraught with financial and personal worry.

My conclusion, if you haven’t figured it out, is that delaying your children’s independence for longer than necessary is detrimental to both parties and should be avoided. If you’re still relying on your parents – or if you’re a parent still providing support to a child that should otherwise be standing on their own two feet – now’s the time to break that cycle. It’s the only way both of you can thrive and grow freely.

To the young lady who wrote in initially, tell your parents to take that support money and put it towards their retirement by bumping up their 401(k) contributions by 2 or 3% a year. Suggest to them that this retirement savings is actually a benefit to you because it reduces the chances that they’ll be a financial burden to you later in life while also giving you the opportunity now to figure out how the world works.

A few of the most shocking facts:
- One in three young workers (those under 35) are currently living at home with their parents.
- Only 31% say they make enough money to cover their bills and put some money aside — 22% fewer than in 1999 – while 24% can’t pay their monthly bills.
- 37% have put off education or professional development because they can’t afford it.

After some reflection, I think two things are happening here.

First, high-income baby boomers aren’t retiring – at least not yet. Many of them – many of my own family members included – are earning more than they ever have in their lives and see no reason to step out of the workplace while their health is intact, while they have freedom to travel and enjoy some of the luxuries in life, and while their children are still somewhat reliant on them. Plus, they’re uncertain about the status of their retirement (after the two recent giant market hiccups) and are afraid to rely on their retirement savings yet.

Quite often – as I’ve witnessed myself in workplace turnover – many workplaces will happily remove two people near retirement in order to hire two or three young workers at a reasonable starting wage. However, many people approaching retirement age simply aren’t retiring. They’ve got their health, they’ve got a healthy income, and they’re not feeling good about the security of retiring. They’re staying in the workplace when previous generations would be leaving.

And they’ve got kids in that 35 and under group who are struggling to keep their head above water, which leads us to the second problem.

I’m thirty. Many people my age still receive money regularly from my parents – I know several people personally who do. Beyond that, I know a few that still live at home with their parents. I know one married couple who lives with the bride’s parents.

Yes, I know more people who are on their own and fully independent than the people who are in these situations, but the statistics bear out the painful truth: children are remaining reliant on their parents until an older and older age.

Sure, some of it can be blamed on the job market – if baby boomers aren’t leaving the job market, then fewer new, good jobs are opening up.

However, the growth of “helicopter parenting” also plays a role. It’s commonplace for parents to be heavily involved with their children’s lives in college and often this keeps going into the workplace, where parents are involved in the salary negotiations for their children and, obviously, provide a home for their children if the job hunt doesn’t go quite as expected.

As a parent, I understand the desire to want to provide safety for my children. I don’t want my daughter to scrape her knee and I don’t want my son to fall off his bike. But I realize that if I don’t let my daughter climb those monkey bars and I don’t let my son ride off on his bike, they’ll never build up the self-confidence they need to realize that they can do this. Instead, when they fall, they’ll simply expect me to help – and that reliance often breeds a secret resentment as well.

The solution to this sticky scenario is pretty straightforward: cut the cord.

Parents, let your children be independent. Let them fail a few times. Let them struggle a little. Yes, it’s tempting to go in there and solve their problems and kiss their scratches, but that short term balm causes a bigger long term problem of a lack of self-reliance. Don’t send your child money. Don’t call them constantly with encouragement. Don’t try to do things for them, either. Let them grow and figure it out.

Children, cut the connection yourself. Ask your parents not to send that money and not to be involved in the core of your life. If they keep interfering, stop telling them about what’s going on with you. It’s not a matter of rejecting them or hating them, it’s about a separation of your life from theirs. It’s about growing up and taking the reins of your own life.

Another point: don’t be afraid to take lesser jobs. You probably won’t get the perfect job right out of college. That doesn’t mean you just sit and wait for it to happen. Work somewhere, even if it’s just delivering pizzas. Make your own money. Put in your own hours to earn that money. And use that money to fly on your own. Yes, it’s expensive. Yes, you won’t get “ahead” as easy if your parents aren’t paying the bills. But you’ll learn how to rely on yourself and you’ll also learn how to make ends meet on a limited budget. The end result of that is that when things begin to turn around for you, you’ll have the self-reliance and maturity to grab things by the reins and take charge from day one.

It’s not about building the perfect, ideal path through life – there’s no such thing. Everyone will eventually fall at some point. Instead, it should be about learning that you can pick yourself up and dust yourself off on your own, and go on from there. This is an absolutely essential skill for the modern working world, and helicopter parenting makes this far more difficult.

These are all apt definitions of financial independence, perfectly applicable to different points in life and each useful as a goal for some people. Let’s take a look.

Freedom from financial reliance on loved ones
This is a freedom that many young people earn in their late teens to mid twenties, as they get through college, earn a degree, find a job, and separate themselves from their parents. For many people, this is financial independence. They strive to be their own person, independent of the people around them, capable of standing on their own two feet.

I achieved this goal at age twenty-three, after graduating college and moving on to a well-paying job. I partially achieved it at age eighteen after departing from college – other than holiday trips and one very long summer when an internship fell through, I didn’t live at home after that, I had steady work that provided income, and scholarships and loans took care of the college bill, though my parents did assist with little things fairly regularly during my college years.

Setting it as your goal If you can survive for a significant period of time (multiple months) without going rapidly into debt or without a steady cash infusion from your family, then you’ve achieved this goal. Generally, it requires a decent job, a commitment to keeping that job, and a desire to actually move on from a state of dependence.

Freedom from financial reliance on creditors
This freedom occurs when you are completely free of debt. No mortgage, no student loans, no car payments, no anything. Aside from taxes, you’re free to do what you want with all of your income. This is often used as the definition of financial independence by writers advocating a strong anti-debt position.

I haven’t achieved this goal as of yet. I am rapidly moving towards it, however. Since mid-2006, I’ve eliminated $17,000 in credit card debt, $6,000 worth of auto loans, and $19,000 worth of student loans, fueled by both personal frugality and earnings from The Simple Dollar. Currently, we have about $24,000 in student loan debt to tackle, then our mortgage (at about $170,000, all told). We’re attacking that debt as vigorously as we can, with large advance payments on the student loan debt going out every month. When we get down to just the mortgage, we’re going to start investing as a method to pay it off, as we believe we can earn more by investing our money than by making early payments against a rather low interest rate.

Setting it as your goal Setting this type of independence as your goal takes a strong commitment to the “spend less than you earn” philosophy. You need to be willing to directly put some of your income straight into large debt payments in order to get rid of that debt. This requires enough income to cover your basic expenses and more, a good grasp on how to control your spending, and a debt repayment plan that you’re committed to executing. If you’re willing to take on all of this, then you’re probably ready to take on this goal.

Freedom from financial reliance on employment
Many financially stable people view this as true financial independence: an end to the financial reliance on employment. It doesn’t mean you have to stop working, it just means that income from your work is no longer a requirement. It appears under many names: retirement and “walk away from it all” money are two of the most common ones.

I haven’t achieved this goal yet, either. My wife and I have a lifetime financial plan that involves debt freedom, building the house in the country that we’ve both dreamed of since we were young, and then heading towards this type of financial freedom (hmm… this plan alone might make for an interesting article).

Setting it as your goal Many of the same principles for debt reduction apply here. Spend less than you earn and invest the rest of it for the long term. Work on maximizing your income and minimizing your spending and sock away that difference. This means not only maximizing your career, but maximizing your frugality, too – know the real value of your time and do things with that time that produce value.

Financial independence is a great goal, but as with any goal, you have to define exactly what it means for you and then define a plan to meet that exact goal. Without that exact definition, you’re just whistling in the dark.

Read that statement again. Close your eyes for a moment and imagine if that sentence were true in your own life? Would you be ready?

Most people would panic if they came into work and found a pink slip, simply because they’re not in a financial place to handle such a situation. They’d furiously apply for unemployment benefits, start chugging the Pepto-Bismol, and hurl their resume out there to a hundred new places, hoping (praying) for a new job to come along quickly.

How could one be prepared for such a blow? In an uncertain economy, such a blow could happen at any time, no matter how “safe” you think your job is – do you remember the “safety” of the Enron folks in 2002-2003, for instance?

Right now, start acting as if the above statement is true at all times. Believe constantly that you’re just a few days from being fired and then try on a few of these new behaviors for size.

Stop spending foolishly This is the biggest first step. If you’re spending money in needless ways, curb them severely until you’re in a state of financial independence – and if the thought of getting fired makes your stomach tighten, you’re not there yet.

Start building a solid emergency fund Count every dependent you have. For each one of those, you should have at least two months of living expenses in a high-yield savings account – I’d recommend three months per dependent. That way, if everything falls apart, your family is protected.

Build a real budget This doesn’t mean pulling numbers out of the air and assigning them to arbitrary categories. This means counting up every dime you spend for a month, sitting down with all of it, figuring out where you can cut the fat, and setting some goals for the next month. Do that over and over again and you’ll start feeling in control of your spending.

Pay off all of your high-interest debt Sit down with all of your debts and construct a debt repayment plan. Given that this is urgent, I recommend starting with the debt with the smallest balance, just to get rid of that monthly payment, and keep working from there.

Minimize your required monthly bills Also look at all of the bills you pay in a given month. Could any of them be trimmed back a little or even eliminated? Look especially at any entertainment bills and any memberships you pay for. Do you use these enough to justify the cost? Remember, every dollar of fat you trim here will roll straight into getting rid of those debts much faster.

Start firming up your social network Invest some time touching base with as many people as you know. See what they’re up to these days. You shouldn’t actually look for job opportunities, but instead look for opportunities to help out your social network. Make connections between people and such. If your social network is strong, when the moment comes and you do get that pink slip, you’ll have a lot of strings to pull to help you get back on your feet.

Keep your resume polished The best time to get your resume in great shape is right now, when you don’t have the stress of needing to cram something together. Polish it up and get it looking good.

Spend your spare time developing skills or laying the groundwork for a side business. Don’t spend your spare time watching American Idol – spend it improving yourself and making sure you’re in a more secure position with multiple streams of income.

This is a waste of time since I’m not going to be fired! There are two immediate responses to this complaint. First, when that pink slip shows up on your desk, this “complaint” will seem really foolish. Second, even if that pink slip never does show up, executing these steps over a period of time will create a situation where you can walk away from your job whenever you want to – the feeling of true financial freedom.

So take that phrase and put it all over your environment so you’ll see it time and time again. It will remind you throughout the day to keep your eye on the ball and put yourself in a position where it doesn’t matter any more.

Here it is, one more time:

You are going to be fired from your job this Friday.

When you talk about “walk away from it all” money, how would you estimate that? I know it would be different for each person, but what elements do you take in mind, and what percentage of savings or what size emergency fund (24 months of living expenses, for example?) would you constitute reaching that point?

Before you even start looking at this, you need to have a very strong bead on your realistic spending over the course of a year. What do you really spend over the course of a year? Do you anticipate something significant changing that in the future? Figure out your real numbers, not the ones you think you spend in your head.

I think this largely depends on how you define “walk away from it all” money. I see three common definitions:

First, enough money so that you can survive a cold career change without skipping a beat. This is the easiest level to achieve. Basically, it means that you are financially secure enough that you could decide to just go back to college and start over with a new career and financially survive all of that.

Second, enough money so that you survive an extended job loss, but are intending to work in some capacity for the rest of your life. In other words, the level of money you need to simply walk away from your job if you’re burnt out and spend three years recharging, but not enough to truly never work again. This is what most people think of when they think of “walk away” money, I believe.

Third, enough money so that you never work again, period.

Let’s look at each case, because they’re vastly different from each other.

“Cold Career Change” Money
This type of situation implies that you’re not walking away from the work force at all, merely changing direction. It may require a period of time for re-education, but for the most part the biggest change will likely be a reduction in salary at first that will recover over time.

Thus, this kind of “walk away” money is best figured in terms of a cash emergency fund. That fund should be able to replace your living expenses (plus 20% or so, in case of significant life changes) over the period of time you need for re-education, plus a small supplement for the first few years of your new career – say, another year’s worth of living expenses.

So, if you’re going to return to school to get your MBA, for example, you should have the two years’ worth of living expenses you’ll need to get through your schooling years, plus another year’s worth to help you with the readjustment to the workplace – three years’ worth.

During such a transition, one is usually covered in terms of health care. Most universities offer some degree of health support and once your studies are complete, you’ll roll onto another job.

So, my thumbnail for this scenario is a year’s worth of living expenses to help with re-entry, plus enough living expenses to cover the time needed to re-educate. The best way to save up for this relatively low amount is probably in cash in a high-yield savings account or in a certificate of deposit.

“Extended Drop-Out” Money
Some people want to walk away from everything for a while – they’re completely burnt out and need some time to recharge or discover their true passions. Such “wilderness years” usually end with an epiphany of some sort and a new direction in life.

Thus, this scenario basically consists of the “cold career change” scenario with an unspecified amount of time tied onto the front end.

This amount will need to be higher if you need to cover your health care costs during the recovery period. If you’ve got a supportive spouse with health care, this isn’t an issue, but if you’re going at this alone, you need to consider your health care situation during that period. Are you covered by COBRA? Do you have another plan available to you? Will you self-insure? Or will you just go off of health care entirely?

Aside from this aspect, though, a good thumbnail for this scenario is a year’s worth of living expenses to help with re-entry, plus enough living expenses to cover the time needed to re-educate and the time you expect to be in the “wilderness.” For many people, this would mean at least five years’ worth of living expenses.

In this scenario, it may be worthwhile, as you’re saving, to put some of it into the stock market in the form of index funds. Since your target is higher, you will likely be saving for a longer period of time, stretching it out into a period where the stock market might help you. Again, once you start to near the point of needing the money, take it out of stocks and put it someplace safer.

“Never Work Again” Money
When you start looking at walking away for good, the game changes yet again. You’ll need to have enough money saved up so that you’re protected from inflation over the long haul but also have enough to live on. The safest way to do this is to buy TIPS – treasury inflation protected securities. These are basically like any other treasury note you might buy – they’re backed by the federal government. The only difference is that they increase in value with the consumer price index – in other words, the value of the TIPS goes up with inflation.

To see how this works, imagine you buy a TIPS for $10,000 this year. It’s got a coupon rate of 4.25% – meaning that each year, it pays out 4.25% of its principal to you. Each year, though, the government adjusts the value of this investment upwards to match the increase in the consumer price index. So, if the consumer price index goes up 3%, the principal on your TIPS goes up to $10,300. Since you’re getting paid 4.25% of the face value of that note, your old payment before the upward adjustment would have been $425 a year. After the adjustment, it’s $437.75 – a little bit of a bump.

This is the safest place to put your money. If you’re willing to swallow more risk, you can balance these with stocks and such, but if you’re intending to never work again, you do want your income to be stable.

How much do I need? Figure up how much you need for living expenses over a year (including paying for your own health insurance), add 25% to that (for an emergency buffer), and then figure up what your taxes would be. Add those three numbers together to see how much you’ll need those TIPS to produce each year. The advantage of being in TIPS is that you don’t have to worry about inflation – it’s covered.

So, let’s say your living expenses are $40,000 and you need another $10,000 for health care coverage for your family. Add another 25% on top of that for a buffer – you’ll need $62,500 a year. With taxes considered, that takes you up to almost exactly $70,000 a year. With the TIPS at 4.25%, you just divide that annual amount by the TIPS rate – giving you a target number of $1.65 million for a very secure long-term situation.

How do I get there? The best way to achieve that number is probably in stocks in an index fund. If you put away $1,000 a month into an index fund returning 8% a year, you’d hit your target number in 33 years – that’s a long way off.

Obviously, you can survive with less if you’re willing to take on risk and also if you’re going to rely on Social Security and Medicare in your senior years, or if you’re going to assume you’re living until you’re 90 and want to have nothing left by then. Both of those allow you to reduce your target number.

But for long-term security, nothing beats TIPS that will work in perpetuity to provide you the inflation-protected living expenses you need forever, plus give you something solid to pass down to your kids.

The Big Lesson
No matter what, it is always beneficial to start socking away money now for any big changes that may come your way in the future. At a bare minimum, it can help you retire earlier – it may also provide you a chance to completely change your life and walk away from a career that isn’t a good fit for you any more.

In March of this year, I actually managed to spend less than 50% of my take-home after-tax income. I used the rest of that money to make a large payment on my student loan debt, do some investing, save for a home down payment, and build up my emergency fund even more. In April, I won’t quite get there because of an income tax payment (which I was able to simply write a check for without blinking), but if you eliminate that tax payment, I could have possibly been under 40% of my take-home spent.

The end result of this is that I’m undergoing a profound change in how I perceive the requirements of my life. This has manifested itself in a ton of ways, some simple and some profound. Here are some examples of what I’m talking about.

More lifestyle choices Last night when my wife and I were taking a serious look at our financial state and we realized that a lot of doors are now open to us that were simply not even worth considering before. It is now realistic for my wife to quit her job and become a stay-at-home mom; we could not have done that before. It’s even somewhat realistic for me to quit my job and become a stay-at-home dad.

Less insecurity about employment Because of that financial freedom, I no longer have to be constantly stressed out about work. I don’t have to go to work and walk on eggshells to make sure I don’t get “downsized” or “outsourced.” I no longer nod my head in agreement and keep my mouth shut during meetings when something doesn’t make sense – I find out what the real story is. Instead of simply following protocols, doing what I’m told, and twiddling my thumbs otherwise, I dig in and fix interesting and worthwhile problems. My work identity is transforming rapidly – and to my benefit. Even more interesting, I recently flat-out told my boss why the change occurred and he was completely dumbfounded.

Less stress about life I’m no longer worried about any bills, nor does the thought of a financial crisis really worry me. I used to have a hard time sleeping at night because of the financial stress, and my temper was also much shorter than it has been as of late. The sole difference is in my personal stress level, and that stress was mostly fueled by a feeling of being trapped and of hopelessness about my financial state. It’s gone now, and I’m much better for it.

Discovering and rediscovering the things that make me happy When I come home at night, I spend maybe an hour doing stuff I have to do, like housework and such, and the rest of the evening is spent doing what I want to do. With the biggest stresses gone from my life (work stress and financial stress), I realize how many interesting things I really want to spend my time on. I’ve rediscovered my love for writing (and you’re reading some of the output of that), been reading like a madman, been spending hours with my son (especially taking him to the park), been teaching myself how to play the piano (using one freely available to me), and basically doing stuff that seems enjoyable to me. What do all of these have in common? They cost very little money and bring me a lot of personal enjoyment.

So, the question to ask yourself is whether or not the stuff you spend your money on is worth sacrificing this type of freedom. Is splurging for a new Lexus versus driving your Caprice for a few more years really worth what you truly give up for it? For me, I will never go back to spending anywhere near all of my income in a given month, at least not until retirement. The freedom from spending money is an incredible freedom.

The truth is that the nature of the parent-adult child relationship is changing from a parent-young child dynamic into a relationship of individuals with much more equality, and that shift is difficult, even for people who have known and loved each other from the earliest days. Financial relationships are just a part of this changing dynamic, but given the emotional challenges of money, many parents and many children end up quite hung up over the financial aspects of this transformation.

Here are some tips for how to handle this transition without damaging a lifelong relationship.

Communicate until you can’t communicate any more. As difficult as it can be, communication is the absolute key to surviving a transition like this. If something is bothering you, talk about it. If you don’t know what’s going on and want to be on the same page, make a phone call or stop by for a visit. The best part is that this transition can quite often strengthen the relationship.

Be very clear on expectations. If your child is at college and you’re thinking that you’re going to cut off their financial support before their junior year, let them know and tell them why as soon as you can. If you put it off until later, one of two things will happen, and both are bad. You will either give up on your decision to cut off support (letting yourself down and keeping your child from being independent for even longer), or else you’re going to drop a major, sudden bomb on your child, which is almost a guarantee that your relationship will be damaged.

The reverse is true if you’re the one becoming independent. If you are unclear as to where exactly the financial relationship between you and your parents is at, they’re probably as conflicted as you are. Take the first step and give them a call so that you are all on the same page on this. If you don’t, you’re bound to wake up one day with a sudden and major change in your financial status, something that no one wants.

If your child is still at home, sit down and talk about expectations. When do you want to cut financial dependence? How long do you expect to be financially dependent? If the answers to these questions are very far apart and it hasn’t been communicated, you’re asking for trouble.

Don’t know how to talk about this? Here are five “ice breaking” questions that can help get the ball rolling.

1. Where do you want to be in one year? In ten years?
2. What will those goals require in terms of support from the other?
3. What do you want our relationship to be like in one year? In ten years?
4. What are your dreams for the remainder of your life? What needs to happen in the short term to make those dreams happen?
5. What does independence really mean, good and bad?

Don’t just do it once and forget it; maintain the conversation. If you just talk about these issues once, it will help, but the dynamic of your relationship will continue to change for a while until you find a steady state you’re both comfortable with. Don’t let the issues become old and stale; hit upon your goals, perspectives, and feelings on a regular basis.

It makes saving for retirement and long term care difficult for the parents. If a parent is still spending a significant amount of money each month financially supporting an adult child, that’s money that is not going towards retirement investment, which means that the parents will be required to remain in the workforce longer and have a greater likelihood of becoming a financial burden upon their children late in life.

It reduces the parents’ standard of living. At a time when parents should be enjoying the fruits of a lifetime of work both in the workplace and in raising a family, they are still saddled with a serious financial commitment which reduces their security and their quality of life in the present.

It creates a sense of entitlement in the relationship. As time goes on, financial support moves from being appreciated to being expected. Children begin to treat financial support as part of their salary and begin to live a lifestyle beyond their means. They begin to feel entitled to this support. It is a natural occurrence; any repeating event soon becomes an expected one in a person’s life, like watching 24 on Monday evenings.

The longer the relationship continues, the more emotionally devastating ending the tie becomes. As the financial connection becomes entrenched, it becomes more difficult for both parent and child to cut that tie. The parent is often consumed with unnecessary guilt when the thought occurs and also is afraid of negative ramifications from cutting the tie, while the child is ever more reliant on that financial support to sustain their lifestyle.

The key to severing such ties is to do it as early as possible. When a child is able to walk alone, that child should walk alone. It allows for a healthy relationship between parents and children that isn’t tied to a financial situation, reduces the impact of emotional damage, and allows the parents the financial freedom to plan for their future.

First, drop any resentment you have. If your parents elected not to pay for your education, that’s their choice. Do you consider yourself to be an adult? Then act like one. If you don’t consider yourself to be an adult, drop out of college, move back into your parents’ basement, and play video games for a few more years. That’ll show ‘em how mature you are.

Now that I’ve got your attention (and if you’re still here, you’re more mature than most college students), a big part of being an adult is dealing with adversity, and resentment is one of the most sure-fire ways to fail when dealing with adversity. You made the choice to go to college and this degree will benefit you and only you, so it stands to reason that you are the person who should bear the brunt of the cost. If your parents are paying for a portion (or even all) of the expense of college, that is a gift. Consider yourself very lucky, not entitled.

Second, if you’re getting nothing out of college, get out of college. If you’re just barely passing your courses and spend all of your time, well, wasting time, college may not be the place for you. Take a one year hiatus and do something completely different, something that sounds authentically exciting to you. Live like a homeless person in Europe for a year. Wash dishes in the best restaurant in town and observe what’s going on in their kitchen. Play your guitar on the street corner for change. Sign up for a volunteer corps. Do that one thing that sounds exciting to you and do it now so you aren’t wasting money sitting in your dorm room wondering what the hell you’re going to do with your life.

Third, even if your parents are covering all of it, don’t turn down opportunities for aid and scholarships. Spend some time in the financial aid office and see if there are any additional packages that can benefit your situation. Even if the cost you’re reducing is not your own, your parents will have more money with which to both spend and save for their own retirement (think of it this way: if they have more in retirement, there’s less chance you’ll have to pay for their care when the time comes). No matter what, seeking out financial aid and scholarships helps your financial picture in the long run.

Last but perhaps most importantly, take advantage of the college experience and use it to reduce costs, whether you’re footing the bill or not. I wrote about this topic in detail in the past, so I’ll just summarize by saying that college affords you a lot of ways to live cheaply and have amazing experiences on the state’s dime. Don’t spend your time dropping $200 on a new pair of pants at the mall when your campus is loaded with tons of free opportunities – and some amazing ones that can even put cash in your pocket.

No matter what, though, never spend your time in college harboring a resentment against your parents for what they did and didn’t spend on you. You are taking the reins of your own life now, and by framing your life in the context of what your parents are doing just continues the cycle of childhood. If you do nothing else because of this article, grow up and realize that as an adult you are the one responsible for the decisions. Your parents are just there to offer a helping hand if they can, nothing more, nothing less.

There is a solid case for no support at all. My parents gave me almost no financial support after I left for college outside of housing and food during my first college summer (the only one where I returned to my hometown). Is this better or worse? I don’t know for sure, but I do know that as a mature adult, I have some powerful reflections on the college experience from a financial perspective that I would not have now if I had financial support. Don’t assume that you have to save for your child’s education; instead, ask yourself what is right.

Start saving now. Every day you delay is a day that it will be harder to pay for your child’s education. If you’re going to pay for it, start now, even with small amounts. Open up a 529 college savings account so the earnings are tax-free (if used for educational purposes) and set up an automatic deduction plan so that your money goes into there automatically each week or month. This way, it will just quietly build up over time until you’re ready to use it.

Save equally for all of your children. I started my son’s 529 just before he was born and I put the same amount in it each month, along with contributing any cash gifts he receives (at least as an infant and as a toddler). If I have any children, I will do exactly the same thing for them. Just to make sure it is truly equal, I adjust the amount I deposit on an annual basis for inflation, so although my son’s earliest payments are smaller than my future childrens’ earliest payments will be, his college costs won’t be quite as great because he will attend college earlier. As far as I am concerned, the money in this account is his; it will be used first for college expenses – and if he doesn’t need it then, it will be given to him for post-graduation things like a home down payment. The same will be true of any other children I might have.

Don’t punish a child for success. If one child works hard and earns a scholarship, that child may be resentful if you then decide that you don’t have to pay for any of their education, but then spend tens of thousands of dollars educating that child’s sibling. What do they learn? That hard work doesn’t really matter because someone else will just step in and level the playing field anyway. Being unequal to your children can build resentment and misunderstanding. Keep what you’ve saved for that child for graduate school or, in the event that they do other things, transfer that money to them in another fashion. If you simply must do this, have an open family meeting about it with everyone involved; if you’re unwilling to do that, then you need to do some serious soul-searching about larger family issues.

Similarly, don’t reward a child for failure. If one child works like crazy to earn a lot of financial aid, while another child laughs it off, don’t reward the second child with the lion’s share of your educational savings. Just because one child is resourceful and a hard worker and another child is not does not mean one child should be given more than the other.

Be open about what you can give. Never, ever dangle a carrot in front of your child that isn’t really there. For example, while I was in grade school and junior high, my parents said that if I got into a college, they would “help me out a lot.” Well, when I finished my sophomore year in high school and got some very strong scores on my college exams and it became clear that college was in my future, they suddenly admitted to me that they had nothing at all for me and that their promises were merely a carrot to try to convince me to work harder at school. This was one of the largest disappointments of my life and it led to a short period where I basically didn’t care about getting into college at all. Never put your child into that situation.

In summary, decide early what you’re going to do, be equal and fair about it, and be clear to your child exactly what they can expect for aid.

Here are some ways to handle a financial crisis with regards to your parents, both before and during the crisis.

Don’t expect anything. Being independent means that you’re not depending on anyone for anything. Remember that in your independence, your parents are setting you up to be their equal, not their child. They don’t rely on their parents for support (well, if they do, there are bigger familial problems than this post can address), so if you wish to be considered an equal, why should you expect the same?

Talk to your parents about these “what ifs.” If you’re considering a move with some risk, simply find out what your parachute is like. Don’t assume anything at all; simply have a healthy conversation where everyone’s beliefs and expectations are laid out on the table. Quite often, your parents will be able to offer you assistance in nonfinancial ways that you might not even imagine.

Don’t hold a grudge if you don’t hear what you hope to hear. If you believe that your parents would help you no matter what and you hear otherwise, don’t hold a grudge against them. A healthy relationship with parents can be an invaluable thing to have through thick and thin; just because they don’t provide financial support to you any more is a poor reason to abandon that relationship.

When a crisis occurs, be open about it. Once it is clear that there is no financial expectation, you should be open with your parents about financial crises. They can provide emotional support, counseling, and perhaps other invaluable nonfinancial assistance.

Ask for their assistance in planning in advance for a crisis. This is a very useful step for protecting yourself from future mistakes. Suggest that your parents set up a savings account with you that can only be withdrawn upon with both of your signatures, then make deposits into this account as an emergency fund. Your parents may be willing to make some deposits as well. Then, if you face a financial crisis, you’ve got several things in your corner: great counselors who can provide advice and financial resources to draw upon if there is no other way out. Plus, setting up such a fund and sticking to it is perhaps the clearest sign of all to your parents that you are being successfully independent. Even better, this measure prevents you from dipping into that emergency fund for unnecessary things.

What will they learn from being rescued? A failure is first and foremost a learning experience. What will your child learn if you step in and provide immediate rescuing? Will they experience the needed pain that one needs to feel after a failure, a tempering that in the end makes one stronger? Even if you plan to offer support, it might be worthwhile to not jump in immediately with help.

First and foremost, offer counseling. Offer them an ear to talk to, not just cash to solve the problem. Rather than letting money fix things, help them to discover the resources they have inside themselves to solve their problems.

If you offer financial support, make it a one-time gift or a clearly delineated series of gifts. Never give the impression that they can get more at any time, or else they won’t learn how to pick themselves up and fix their own problems. As a parent, part of your job is to teach them life skills. Think of it this way: when they fell off of a bike when they were little, you didn’t offer to ride the bike for them. You picked them up, dusted them off, gave some encouragement, and put them back on the bike. The same principle applies here.

Offer nonfinancial assistance. You can also offer similar support as to what a nonparental friend or relative might offer: assistance in locating new work, connecting with potentially useful contacts, and so forth. This is the kind of assistance that is useful to any professional, and may be particularly useful in this case.

If the situation is truly apocalyptic, offer shelter and food. If your child has actually lost their home, you can again offer indirect aid such as housing and food, but this situation should be clearly defined as temporary, contingent on your child making continual effort to improve his or her situation and eventually fly on his or her own again. Indefinite relationships where children move back in after independence can be very, very uncomfortable for both the children and the parents.

Don’t force it. Some children are simply too fiercely independent to want to accept help, so don’t force help upon someone who does not wish to accept it. This is not an indication of a lack of appreciation or love, just a desire to be able to walk strongly on their own two feet, no matter what – an attribute that you should be proud to see in your child.

Here’s some advice for dealing with that first full taste of financial independence.

Resentment is a waste of time. If your parents inform you that they are cutting ties, a feeling of resentment towards them is useless. In fact, harboring such resentment is usually a clear indication that some maturity needs to happen, and the cutting of financial ties is often an event that requires people to become more mature.

Accept it as a challenge. No matter the age at which financial ties are cut, there are going to be challenges and lifestyle changes. Rather than complaining, look for ways to accept the challenge. Spend some time learning how to budget. Challenge yourself to live more frugally every day and perhaps start building up your own financial backbone.

Don’t continue to spend as though nothing has changed. The result of this is debt, and a lot of it. It’s so easy to just keep buying and use those credit cards to purchase things you don’t need, but eventually those bills will have to be repaid with interest. Now is the time to learn how to live a little leaner; buying stuff not only prolongs things, it makes the process of actually learning to walk on your own that much worse.

Keep the channels of communication open. If you’re feeling a strong sense of resentment towards your parents, you might be feeling as though you should completely cut ties with them. Think about this for a moment. They have been giving you money that they’ve earned for your entire life, since even before you were born. All they’re asking now is that you fly on your own now that you’ve transitioned into being an adult. Is this truly cause for resentment and anger?

Rather than cutting yourself off from them completely, now is the time to keep those channels of communication open wide. Tell them about the challenges you’re facing and ask for advice, not money. Think about it this way: they once went through what you went through and eventually wound up in good enough financial shape to support not only themselves, but also you (and perhaps other siblings) for your entire life, so they probably have at least some idea of how to do things.

Re-evaluate what you’re doing with your life. The cusp of financial independence is a great time to sit down, figure out your values and your goals, and determine how to work towards those goals. This process can help you really understand why you are spending money now and make you reconsider much of what you do with money.

For many others, though, finding the right time to sever financial ties can be difficult. Should it end when they go to college, or should you support them throughout their studies? Should you continue to give them money while you can “afford” it? For many families, these are questions without clear answers, and by avoiding them, you’re merely postponing the inevitable.

So when is the right time to cut ties?

When your heart even begins to hint that it’s time, it’s almost always time. Many parents tend to wait longer than necessary to cut financial ties to their children out of a sense of obligation. The truth is that by paying allegiance to this imagined obligation, you’re actually damaging their personal growth by supplying them with financial support.

When your parents cut ties with you. Think back to that period and ask yourself whether that was the right time – and whether you learned important things from that separation. This is the best example you have in your life of how to cut the ties, so use it as a frame of reference to decide what is right for you.

When your children are using the money to buy many frivolous things. If you see that your children are buying brand new automobiles and other items that are clearly beyond their means without your support, it’s time to consider cutting the support because they’re beginning to use your support as part of their expected salaries.

When they begin to expect and demand what you give them. When support of an adult begins to transform from assistance to entitlement, it’s time to stop giving and let them start living.

Here are some tips for when the time comes to cut financial ties.

Make it clear why you’re doing it. Don’t just call them up and say, “In six months, you’re done,” because that will just cause resentment. Instead, call them up and reinforce the fact that you feel they are ready to be on their own. Don’t let it be about money, let it be about independence and respect for a maturing individual.

Give plenty of forewarning. Do not just cut ties without warning, because they may have made financial commitments relying on your support. Instead, give them a cutoff date that’s very clear (a calendar date, not “in about a year”). You might also want to start slowly reducing the support.

Offer advice and nonfinancial support. Offer as much advice as they want, but don’t thrust it upon them. While doing this, be very careful to follow some basic advice for talking about money to adult children. Don’t be pushy about it, but make it possible for them to come to you.

In short, you should frame the conversation about independence and respect, not around dollars and cents.

Many college students dread talking to their parents, mostly because they believe they’ll be perceived as failures and let their parents down. Thus, when a major talk comes, they go in with a combative attitude and things don’t go very smoothly at all. It’s a scenario I’ve seen repeat itself time and time again, and it’s one that is easily avoidable.

Here are several things that you can focus on in order to make a financial discussion with your parents go much easier.

Don’t be angry. Quite often, parents will make statements and suggestions that provoke a sense of anger in the child, even if that’s not their intention. If you find yourself getting angry during this talk, look like you’re thinking, count to ten, and then ask yourself why exactly you got angry. Usually, it’s defensiveness, so ask yourself what you’re defending and why. In many cases, you’re defending a paper castle, something that you’d be better off revealing than hiding.

If their attitude makes you uncomfortable, ask questions. If they appear superior and condescending, ask them calmly if they’ve ever been in an awkward money situation before and how they dealt with it. Ask them how they would deal with your situation given that the past can’t be changed. Do it calmly and rationally above all, because anger is the one element that will cause this conversation to collapse.

Be completely open. If you are hiding things, you will only make things worse. Your life doesn’t have to be an open book, but if something is relevant to the topic, be open about it rather than hiding it. Not only will this answer more of your questions, it will encourage your parents to be more open as well.

Don’t be combative. Don’t enter into a financial conversation perceiving it to be a war, with ground gained and lost. Instead, look at it as a situation to personally improve yourself. The only way people win in conversation is if they gain a greater understanding of the issues discussed, not if they “win” or “lose.” Thus, quite often there’s nothing to argue or feel resentment about.

Ask lots of questions. The most valuable thing you can gain from a conversation is a resolution to the questions inside of you, so ask every question that comes to mind. Not only will you receive answers, giving others the chance to talk and say what’s on their mind will make them more calm and collected as well.

Since I’ve entered adulthood, I’ve had several long talks with my parents about various issues. My parents have always been quite easy to talk to, and when I had my own child, I asked them for advice on how they made topics that were so troubling so easy to talk about. Here’s what they told me, in so many words.

Don’t push. Adult children are often trying very hard to spread their wings and fly, but they will know better than you will when the time is right to ask for advice. Don’t pressure them into a conversation unless there is a strict need for it.

Admit your own mistakes. As children enter adulthood, the relationship between you and your children has to change; you need to move from being the superhero protector into being a respected and trusted advisor and friend. Admit where you’ve messed up in the past, too. No one on earth has been financially perfect, so dredge up a few of those mistakes and add to your own humanity. This will pave the road to a great deal of openness.

If you fear there are problems, let them know that it’s okay to talk about them. Tell them this directly, and bookend it with your own admissions and flaws.

Don’t be judgemental. The world of a college student today is substantially different than the world when you were that age. The culture almost coerces you to get into at least some debt trouble by making credit access so simple without explaining the drawbacks, and also making expensive consumer goods highly desirable. Student loans are also enormous, and they also have huge expectations of a great job after graduation that aren’t always feasible because a degree today isn’t worth what it was twenty years ago. Using your own experience as an indictment on theirs is completely unfair.

Ask questions and listen. When I had “money talks” with my parents, they quickly devolved into lectures in which I would sit there and nod my head and ignore every word of it. Instead of lecturing, ask them questions about how they’re spending money and listen to what they say. Questions that delicately lead towards certain conclusions are almost always better than lectures and pointed statements.

Give your child the benefit of the doubt. There are probably some issues that your child simply isn’t comfortable discussing with you – if you think back to that age, remember the things you were uncomfortable discussing with your parents. Allow them to throw dirt over their tracks; don’t spend a lot of time trying to wheedle out something that makes them uncomfortable. Quite often, if you show yourself to be approachable and demonstrate that you’re being attentive, they’ll tell you many things anyway.

Check in – but not too often. Some parents believe that when the child is out the door, you should let them call you; others try to call multiple times a day and still micromanage their lives. The best balance is somewhere in between: give them space, but remind them that they’re loved and that they have support. My parents called a lot at first (I was the only person I knew at my college and I got very homesick), but as time went on, they scaled back slowly, to the point where I called them more than they called me.

Tomorrow, we’ll expand on that final point and look in detail at the process of cutting ties, financial and otherwise.