Financial Independence Week: The Dangers Of Financial Dependence

For many people, adulthood is a time to find your own path and walk alone, but some parents and children have difficulty breaking the financial ties that bind and the financial dependence continues well into traditional adulthood. This is a dangerous path, fraught with many challenges for both the parent and the child, some of which aren’t obvious at first glance. If you are a parent with a dependent adult child, or an adult child who relies on financial support from your parents to get by, keep the following in mind:

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.

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  1. Tina says:

    Wow! Thank you. I’ve forwarded this post to my parents who are supporting my two younger siblings and it is draining them both financially and emotionally.

  2. cindy says:

    I think these comments are a little one sided. Although I live with my parents I pay 1/3 of the mortgage, my mothers car payment, and 90% of the groceries on an entry level salary. I am saving to move out, but currently even a small studio apartment in the bad part of town costs more than my parents entire mortgage. While some people may mooch of their parents, it isn’t true with everyone.

  3. Margaret says:

    I have gotten financial support from my mom, but I feel no guilt about it whatsoever. She loaned us money to pay off a rather large debt, and we are repaying her with interest. We are paying less interest than we would have on the loan, and she is earning more interest than she would have on her (very conservative) investments (mainly GICs). Similarly, when my dad died, mom didn’t want to sell the farm out of the family, but she couldn’t afford to maintain it (my parents were seperated). My husband and I bought the home quarter, mom holds the mortgage, she gets comparabe interest to what she would get in her investments and we get a slightly better rate than we would get from a bank. Because she sold to us, she got to put some clauses in the mortgage that we wouldn’t have had to have with a bank (they are a bit of a pain, but livable, and they were important to her). Because she is my mom, she will wait to deposit a cheque if our payday is out of sync with our month. I think that is a lot of help, but I don’t think it is particularly disadvantageous to mom (well, maybe having a lump sum of cash for the farm would have been better, but we wouldn’t have been able to swing it, so she would have had to sell the farm out of the family).

  4. Pamela Worley says:

    My husband and I are newly married and I struggle with his financially dependent children. Neither one of them work (and they have good health). My husband works overtime whenever he can and I have 2 jobs. We are working our butts off and they continually have their hands out. They won’t take any advice from him and if he holds back money, his daughter will not allow him to see his granddaughter (until of course, she needs something again). Then, his guilt is so bad, he gives in. It’s a cycle that needs to be addressed. As the stepmother, I struggle with my place in this. It’s good to read this kind of information that can truly help people to deal with a real problem.

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