Avoiding the Trap of Financially Dependent Children

Over the past few weeks, I’ve had a number of conversations with parents of adult children, both independent and dependent. Since my own children are growing older, I wanted to know about their experience helping their children get ready for independence and also making sure that when they make that leap, they don’t eventually circle back into dependence.

Before we get too far down that road, let’s talk specifically about what I mean.

A financially independent child is one that does not demand any sort of financial upkeep. You may choose to give that child irregular gifts, but doing so is very secondary to securing your own financial situation and your own financial future. It is possible for financially independent children to live with their parents in a situation where those children are contributing in full financial equality to the expenses of the household.

A financially dependent child is one that does require some sort of financial upkeep. This may be a child that lives outside of the home but requires some sort of regular contribution of money to maintain their lifestyle. This also includes children that live at home with their parents without contributing equally to the expenses of the household.

Obviously, there are degrees of financial dependence, but our goal is to raise three fully financially independent children.

What’s bad about financial dependence, though?

First, it’s a persistent financial drain on the parents. Such a drain prevents the parents from adequately saving for retirement and directly extends their working life. It also reduces the likelihood that they’ll be able to care for themselves financially in their later years.

Second, much like training wheels on a bike, it does nothing to teach children how to survive on their own. Living a truly independent life is a powerful step, one that everyone eventually has to take. Financial dependence prolongs the lesson and often makes it harder to learn.

Finally, it alters the parent-adult child relationship into one of dependence. As long as a child remains dependent on the parent, that relationship is never allowed to mature into one of equals, a state that’s beneficial for both parties.

Financial dependence seriously hurts the parents and, surprisingly, hurts the child as well.

So, how do you avoid having dependent children? Here are the five strategies that seemed to come up most often in my conversations.

Strategy #1 – Ask the Big Question Frequently

The big question is “is this choice really moving my child toward financial independence?” You should be asking this about almost everything you do with your child, starting at a young age, but particularly when they reach high school age.

If you’re doing something that your child should be doing for himself or herself, is that choice moving your child toward financial independence? Rather than investing time and effort in doing their laundry, you should put that time and effort into teaching them to do that laundry for themselves.

If you’re giving your child spending money without requiring something in exchange for it, is that choice moving your child toward financial independence? Rather than handing your child $20 to buy something or letting them just toss it in your cart, make that money exchange dependent on chores or other personal efforts.

If you’re allowing your children to make life choices without considering the financial impact at all, is that choice moving your child toward financial independence? If you’re just paying for all kinds of extracurricular activities without your child considering that they all cost substantial money, you might want to reconsider that and use it as a teachable moment.

If you’re subscribing your child to an affluent lifestyle without commensurate responsibilities, is that choice moving your child toward financial independence? Consider whether your child really deserves luxury items without putting in at least some effort to earn them, whether it’s in the form of chores at home or effort in the community.

If you find yourself bucking back against those questions, are you actually reflecting on whether or not you’re helping your child reach financial independence or just resisting self-criticism without really thinking about it?

Start using that question as a filter for all of your parenting decisions, even at an early age, but particularly as they grow older. That question will nudge you toward more independence for your child and an expectation that they earn things rather than having things given to them, both of which are key lessons. It will also nudge you toward having them learn and practice basic life skills.

Strategy #2 – Offer Non-Financial Help

One of the best descriptions I’ve ever seen of what a good parent-child relationship can evolve into is mentor-mentee. A parent of an independent adult in a healthy relationship actually ends up functioning like a mentor, providing good life advice and insight and perhaps non-financial help on occasion, but not providing direct financial aid.

As your child grows, you should be already nudging yourself toward this type of role in your child’s life. As much as it can hurt, your child actually needs you less and less as they grow up, and you should strive to recalibrate your role as they grow, sliding away from the heavily hands-on parenting style that you had when they were very young to something closer to the mentor-mentee relationship that really clicks when your child is an adult.

How do you do that? The biggest tip I have is to start choosing to offer more advice and less direct aid as they grow. When they reach an age where they can earn money for themselves, roll back the money you’re giving them. When they struggle, choose to offer meaningful advice and help them to build a game plan to solve things for themselves rather than directly intervening. Start to have them make choices between things that they want or expect rather than just handing them everything, and over time dial it back more and more.

In other words, even when they’re still in high school, you should be dialing back your financial efforts for them and dialing up your mentor efforts. Don’t solve their conundrums by spending money or giving them things. Let them start to learn how to deal with unrequited desires and how to balance a relatively small amount of resources.

Not only does this type of support help your child develop independent skills while they’re still in the home, it also prepares them for a solid non-financial relationship in adulthood. In short, use their teen years as an opportunity for them to walk the tightrope with a bit of a safety net, rather than as an extended adolescence.

Strategy #3 – Communicate Expectations Clearly, Early, and Often

You should communicate to your children as early as possible and as clearly as possible what it is that you expect from them once they’re out of school, and it should be a conversation that’s repeated regularly. What is that relationship going to be like? What help are you willing to provide as your child get his or her feet on the ground? What are the restrictions? When will that help end?

This conversation needs to be extremely clear to your child and it needs to happen starting at an early age and repeated regularly as they grow up and begin to move on. There should be no question as to what will happen once they leave secondary school, and they should not leave school with some artificially inflated expectations.

What should be communicated?

Be clear about how much of their postsecondary education you’ll pay for. Will you help them pay for books? Tuition? Room and board? Will you co-sign on student loans?

Be clear about what support you will offer once they graduate and enter the job market. Can they live with you? Under what terms? Will you offer any financial assistance if they’re not working? (Hint: the answers here should be pretty easy and straightforward.)

Be clear about how you will help. Make it clear that you will always be there for advice and assistance, and that you will help if they’re willing to help themselves, too.

Although my parents were actually very good at the other parts of this list, this is the one area where I would do things differently with my own children. My parents weren’t clear to me about how much they would help with college or with my after-college life. I grew up under the impression that if I did well enough academically to go to college, they would make sure that I could go, a belief that turned out to not quite be true. This was mostly due to a lack of clear conversation, and knowing this would have altered a number of my choices. I did manage to earn scholarships that helped, but there was a period where postsecondary education was very much in doubt for me.

Clarity is king. Have clear conversations with your children as early as possible about what you will pay for when it comes to their education and what kind of support you will offer afterwards. Stick to that policy through thick and thin.

Strategy #4 – Establish That Any Adult Assistance Requires Action to Receive Help

Most parents feel uncomfortable with mandating independence from their child because they envision nightmarish scenarios in which the child is homeless or destitute and they can’t bear the thought of allowing their child to have to suffer in that way. Compounding the problem is the fact that conversations like these can end up with the child feeling as though their parents would not help them at the lowest point in their lives, which is rarely true.

Instead, make it clear to your children that you will help them if they are willing to help themselves. They can live with you if they demonstrate active effort toward finding a job or, in the case of a first job, they’re actively saving money toward an independent life. They can live with you if they’re dealing with an exceptional life crisis but are taking steps to move past it. If they are willing to climb up to the tightrope and give it a try, you’re willing to help, too.

This ties heavily into the communication strategy discussed above. Communication is vital, whether it’s making your expectations clear, articulating the advantages of independence, serving as a mentor for their difficult moments, or establishing that you will help them in times of true trial. The more you communicate – and the more you discuss the difficult questions – the clearer things will be for all involved.

The challenge is realizing that enabling is not helping. If you’re providing help that they’re just using to repeat the same mistakes and not actually work toward helping themselves, then you stop helping until they show that they’re willing to work for positive change in their lives.

As hard as it is, you need to not offer help if they’re not willing to help themselves. Otherwise, you’re just enabling a rapid self-destruction or a state where there’s no incentive to become independent. There’s nothing wrong with helping your child along a path to success as long as they’re trying to get there themselves.

Communicate this. Make it clear from an early age that you’re willing to help them if they’re willing to help themselves, and that their steps must be in a direction toward full successful independence.

Strategy #5 – Teach Independent Life Skills as Early as Possible

This final strategy points directly to me, as the parent of a preteen, another child that’s close to that age, and a slightly younger third child. If you want your child to be independent, start teaching them independent life skills as soon as you can.

Make them do dishes. Make them do the laundry. Make them clean up after themselves. Make them get the mail. Make them mow the lawn. Make them prepare meals. Make them keep an organized planner for school and activities. Make them budget their money and plan ahead for expenditures.

The point isn’t to simply work them, but to have them do things that adults typically do while they’ve got the safety net of their parents to help them handle their inevitable mistakes. That way, when they’re actually old enough to go out on their own, they’re equipped with the needed skills.

This does involve quite a bit of work – more work than just doing those tasks yourself. However, every task that they master on their own is one step in the direction of living with full independence from you. Not only will they feel much better about that particular skill, they’ll feel more confident overall about becoming fully independent.

A big part of this is to introduce these tasks properly, because they’ll often be met with resistance. Treat them as a step toward independence, not as a chore to be done. I’ve already found success with this approach with my own children. I simply reiterate the advantages of independence along with some of the responsibilities it entails, and then talk about their own growing independence and how it comes with some responsibilities. Their own nascent sense of teenage independence thrives on this kind of talk and thus far they’re relishing the tasks. This doesn’t mean that all children will thrive in this regard, but it’s working well for our children as we slowly teach them life skills.

Final Thoughts

Financially dependent children are an enormous financial drain on adults right at the time in their life when they should be focused on saving for their own future. Dependence is also an enormous emotional drain, both on the parents and on the child.

Parents owe it to themselves and to their child to find ways to encourage their child’s financial and personal independence. Parents need it in order to secure their own financial future and healthy retirement, while children need it in order to secure their own place in the world.

It’s not easy, however. The emotional bond between parent and child can make it very difficult to give a child the push out the door that is sometimes needed.

There are several approaches that work well in making this happen, the biggest of which is communication. Talk about this matter. Make it clear what’s expected, what you will do, and what you won’t do. At the same time, encourage as much independence as possible and teach your children life skills so that they’re ready to make it on their own.

This isn’t going to be easy, but if you eventually want to grow your relationship into a strong bond between adults with perhaps a bit of loving mentorship, then follow these strategies. They will help cement the kind of future you want for your children and you need for yourself.

Good luck!

Trent Hamm

Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.