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Breaking Away from Financial Dependence on Your Parents
In the past, I’ve looked at how parents can help their adult children move from a state of financial dependence on their parents to a state of financial independence from their parents – such as in this post.
But what about that situation from the other side of the equation? What if you’re financially dependent on your parents but don’t want to be? Maybe it’s due to personal pride, maybe you’re tired of parental interference in your choices, or maybe you want to give your parents more life options. Whatever the reason, moving from financial dependence on your parents to financial independence from your parents is a big goal and a big step for many.
For me, this was never really a choice. My parents almost entirely cut off financial dependence when I was 18 and I moved out to attend college. I would stay at their house during semester breaks and they helped with a few things irregularly when I was a student, but even those things faded away within a year or two.
For others, the process isn’t so simple. Many parents are uncertain as to when to cut those ties, particularly following periods in which their children struggle with the challenges of young adulthood and transitioning into professional life. For children, the desire to be independent is sometimes in conflict with other desires, like the security of having easy financial backing and the perceived emotional needs of their parents and of themselves.
Yet there often comes a point where children want financial independence from their parents. Here are some steps for making that happen.
Start Practicing Basic Life Skills
One of the biggest anchors for ongoing financial support between parent and child is the child’s difficulty in managing many of the basic skills of independent adult life. A financially dependent adult child may be reliant on the conveniences of things like having food prepared for them or even things like having someone clean for them or do laundry for them. This might occur because the child is still in the home or because a parent is footing the bill for these services outside the home.
The first big step that should be taken on the path to independence is taking on the responsibility for those basic life skills for yourself. Learn how to prepare your own food. Take responsibility for cleaning up your own possessions and doing your own laundry.
If you live at home, take on some of these tasks for the entire family. Start making dinner on a regular basis. Handle all of your own laundry and even handle the laundry for shared items like towels and kitchen cloths. Clean up your own living area and all shared areas, too.
These basic steps are part of independent living, and the more practiced you are at them, the easier they become. If someone else is handling these things for you, there is some form of expense involved with it when you’re truly independent. Learn how to do them yourself so you’re not reliant on services or on your parents to handle life skills.
Learn How to Live Frugally
The next step is learning how to live frugally and have a grip on your spending choices.
The most important thing to recognize is that frugality doesn’t mean “cheap” or “deprived” – it simply means asking how to get the most value out of every dollar you spend. Many people translate that idea into doing without things they enjoy or alienating people around them, but both of those things are just examples of not considering value very well.
Common smart frugal tactics include choosing to buy store brand versions of common purchases, making things like coffee at home rather than buying it from a shop, using a grocery list when shopping at the store, bargain hunting for the best price on a particular item, closing up the air drafts in your home so you’re not heating and cooling the outdoors and wasting energy, and negotiating a better deal on your cellular contract.
The key is to try lots of frugal tactics, see which ones work well for you, and then do smart things with the savings like, well, making ends meet without parental financial support. The best frugal tactics become lifelong habits that people keep using over years and years and years, with the savings being channeled into accumulating less debt, even if it only amounts to a quarter here and a dollar there.
Here’s a classic article I wrote on 100 great ways to spend less money.
Establish a Budget for Yourself That Comes Solely from Your Own Income
Along with learning how to do things for yourself and get by on less money should come a basic effort to learn how to budget.
A good budget starts with a real look at your spending and your income and how to make that spending fit within your income. You should build it by looking at bank account statements and credit card statements to evaluate how much you spend in a typical month, then compare that to how much you actually bring home. If you find you’re bringing home less than you’re spending, then you need to use your spending record to figure out what areas you should be cutting back on.
The process of actually assembling a budget, by pulling out all of those bank statements and credit card statements, is usually an eye-opener, as it’s often the first time that people sit down and look at how much they’re really spending. Often, it’s a shocker – you find that you’ve spent $300 at the coffee shop or $400 on some kind of entertainment or $1,200 eating out during the last month and it seems almost unreal.
This process is supposed to be hard and may mean that you cut some things that you really don’t want to cut. This is because you’re living far beyond your means. A big part of financial independence is figuring out how to live within your means. That’s often not an easy thing to swallow, and it may mean some radical lifestyle shifts. If you’re not willing to make those shifts, then you’re not ready to be an independent adult.
Find Your Own Place to Live
Another step that’s often a key part of the process of working toward independence is finding a place of your own to live. Many young adults move back in with their parents upon completing schooling for a number of reasons, but that creates a level of financial dependence because the children are usually not assuming the full cost of independent living. Moving out into a place of your own is a major step toward financial independence from one’s parents.
If you currently live with your parents, one of your first major goals on the path to financial independence should be finding a place of your own to live. Figure out what that will cost, assemble a budget, and see what you can find.
If you find that the cost of a place to live on your own is prohibitive, you have a number of options. One option is to seek roommates and live in a shared apartment or house. Another option is to consider moving to a less expensive area where you can still find work.
One common argument against this is that renting is “throwing your money away” and by living at home, a child is able to save for a down payment on a house. If that is the parent-child arrangement and the child is saving a monthly amount that’s equal to or greater than the cost of living in an apartment and contributing to the chores of the house, then it becomes more of a co-living arrangement and less of a financial dependence situation.
Stop Using Your Parents for Anything Other Than a ‘Last Resort’ When Solving Problems
Another challenge on the road to financial independence from one’s parents is the ongoing temptation to use your parents as an immediate fix to all problems. If you are living a financially independent life, then your parents should only be a “last resort” for serious problems and shouldn’t be relied on for anything more than advice or simple non-financial help.
When a crisis strikes in your life, can you handle it on your own? Try to figure out how to solve issues on your own without parental intervention, especially financial intervention.
If you’re consistently finding that you do not have the financial resources to handle emergencies in your life, then you need to start building a personal emergency fund. Contributions to this fund should be part of your monthly budget, and you should be moving that money into a savings account that you never touch except in the case of a genuine emergency. One good approach is to have that account be held at a bank that you don’t regularly use – an online bank like Capital One 360 or Ally is a good choice.
Use Ongoing Financial Support Solely for Debt Elimination
You may find that, during this process, your parents insist on maintaining financial assistance for you. That’s fine. Your goal should be to live solely on your own means, and what your parents choose to do should be independent of that.
If you do receive regular financial gifts from your parents, use that money to make extra debt payments and nothing else. If they give you $500 a month, write an extra $500 a month check to your student loan company and try to live on what you bring in.
Using their income for lifestyle “perks” is a continuation of financial dependence, as you’re living a life that’s beyond your means.
Although I mentioned frugal living before, I’m coming back to this here because it’s so important. You have to know how to cut costs, and that doesn’t just mean buying store brands and skipping out on a night at the movies with your pals.
Assuming you’ve made a budget, as suggested earlier in this article, you should strive to be cutting every single line of expense in that budget. How do you cut back on your food costs? How do you cut back on your electric bill? How do you cut back on housing costs? How do you cut back on transportation costs?
There are lots of things you can do with almost every category of your budget. You can call service providers to get bills reduced or find better plans. You can learn to handle tasks yourself. You can use mass transit or a bicycle instead of a car. You can intentionally choose lower cost options for almost everything.
This needs to be a mantra for you. How can I live a joyous life while spending less? Look at everything. Leave no stone unturned.
Don’t Use Credit Cards During This Transition
Credit cards can be an enormous financial crutch. If you can’t live through a month or two without adding to your credit card balance, then you are going in the opposite direction of financial independence. A consistently growing credit card balance means you’re financially dependent on credit cards.
The best solution during a period of time in which you’re trying to become financially independent from your parents is to just completely eliminate credit card use from your life for the time being. Cut up your cards and don’t use them at all. Delete your number from online sites. If you have something that must be paid using a credit card, use a prepaid card or an alternate system.
If your answer to this is “I can’t…” then you’re not living a financially self-sufficient lifestyle. The only reason a person would need a credit card is if they are spending more than they’re bringing in or are living so close to the edge that they need the card to make it to the next paycheck. In either case, the real solution isn’t credit cards. The real solution is tightening your budget.
Look for Part-Time Work or ‘Side Gigs’
If you’re not currently bringing in enough money to make financial independence possible, then you need to start looking at ways to bring in more money. One very efficient way of doing this is to get an additional part-time job or start some kind of “side gig.”
There are almost always part time jobs available, no matter where you’re at. It might take a bit of legwork to find them, but they’re out there. It just might not be what you expect or initially want.
As for a “side gig,” your focus should be on things that quickly translate to income, even if it’s not particularly efficient. Doing things like Fiverr generally offers a pretty low return on your money, but it does have the flexibility of being available whenever you have a spare hour or two.
The goal here is to find ways to get more money into your pocket now so you can begin to move toward independence.
Don’t View a Job as ‘Beneath You’
Many people, particularly those freshly out of college, view many job options as “beneath” them. They won’t consider working entry-level retail and thus won’t even bother applying for such a job, preferring instead to be jobless.
Don’t. That’s a mistake. No job is ever “beneath” you if you have goals in life.
Yes, working in entry-level retail might not be the glamorous job you were hoping for, but it keeps money coming in. It helps you pay bills and start paying down your debts. Having a couple entry-level jobs can add up to enough to let you start moving toward independence. Plus, most entry-level jobs have the advantage of being off your mind the second you clock out, so you can retain your focus for other things (like a hunt for a better job) when you’re elsewhere.
Switch to a ‘Career’ Mindset
Another trap that many financially dependent people fall into (and even some people who have broken free of their parents) is viewing their job as nothing more than a job – a place where you give some time and energy and receive money in return and that’s it.
Never, ever treat your job as solely that kind of an exchange. Instead, look at it as a piece in a larger puzzle of a career, even if the job is very entry level or not even in your actual desired career path.
Here’s a question to ask yourself about any job: Beyond the income, what can you get out of this job to fuel your next professional step, one that may lead to better pay or opportunity for advancement? Can this job help teach you leadership? Communication? Can it give you good recommendations? Can you learn any marketable skills here? Is there a way to advance in this path?
Almost every job has something you can add to your skill set and something you can add to your resume. Those things go beyond just collecting a paycheck. Look for them. Execute them.
Set Clear Goals for Yourself
Where exactly do you want to be in one year? Three years? Five years? Now, what’s the difference between where you’re at now and those places? Making up that difference is your goal. The gap between where you are now and where you want to be is the very foundation of a good goal.
Start setting some goals for yourself, but rather than making them all about the destination, focus on the journey. What do you need to do in order to make this happen? Focus on that. Your goal shouldn’t be to get a $50,000 job in two years. Instead, you should ask yourself what you need to do to maximize the likelihood of getting the job, and then make your goal oriented around nailing those steps.
Define a few key goals in this way, focusing on the steps you can take care of to make them happen. Good goals are specific (meaning it is abundantly clear what exactly you’re doing), measurable (meaning it is very clear whether you’re succeeding or not), actionable (meaning it is all about action you take, not about what others are doing), and time-bound (meaning that you have a certain deadline – preferably a tight one – to take care of it).
For example, you might have a goal of completing two career-oriented certifications in the next two months. That’s a great career-oriented goal! You might have a goal of living only on your own income and building a $200 emergency fund in the next month. Again, that’s a great goal for independent living!
Set goals. Keep your eye on them, every day. Take actions every day to move toward those goals. That’s the only way you’ll get there.
Talk to Your Parents and Involve Them in This Process
As you move toward independence, it’s important to remember the other stakeholder in this process – your parents. You need to talk to them openly and involve them in this process, all the way along. Candor is needed here. Be clear that you wish to become independent and ask them for ideas on your goals and plans.
What you’ll find, the vast majority of the time, is that your parents will become allies on this journey. Almost always, your parents want you to find independence and want to help you get there, and dependence only occurred because they wanted to shield you from some of life’s rough edges. Showing that you’re trying to take this on yourself is a sign of maturity that most parents will relish.
You’ll probably hear a lot of compliments during this process, but you’ll also hear some criticism, too. Your parents may not love your plans and may offer suggestions. Take their criticism seriously, even if it hurts. Try to figure out how that criticism translates into something meaningful that you can take on.
Respect Their Wishes, But Make Your Own Decisions
Remember that parents come in all shapes and sizes. Some will be clingy, while others will push you out the door. Some will be very hands on while others are hands off. Some will be very supportive and helpful, while others may be narcissistic and mostly interested in their own feelings.
Respect who your parents are and what their wishes are, but in the end, these are your own decisions. Use their input as a tool and even as a guide, but don’t allow them to make the decision, especially if you feel it’s wrong for you. If they can’t rationally explain why they want you to do things a certain way, then it’s a sign that you should trust your own reasoning.
Your goal here is your independence. Ideally, you can do this while maintaining a great relationship with your parents, but that’s not always a given. Respect what they’re saying, but make your own decisions. After all, this is your life.
Eliminating financial dependence on your parents is a huge step toward your own financial independence. It allows you to stand on your own two feet and fully make decisions on your own behalf, and it allows your parents to break free too and use their resources fully on their own life journey.
It’s not going to be easy, but the rewards for everyone involved are tremendous. It’s a new level of freedom for you and, surprisingly, a new level of freedom for your parents, too.
Good luck to all of you!