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How To Help Young Adult Children Achieve Financial Independence

Sarah Pierce  |  January 31, 2024

Is your child still tapping into the bank of mom and dad? Here are 5 ways to help them achieve financial independence.

Our financial independence — much like any other skill someone is learning for the first time — doesn’t come all at once. Instead, it’s a “work in progress,” according to a new report from the Pew Research Center, wherein just 45% of young adults (age 18-34) say they’re completely financially independent from their parents. Those who aren’t financially independent frequently have costs for things like household expenses, cell phones and streaming services covered by the ever-trustworthy “bank of mom and dad.” 

The good news is that of those young adults surveyed who aren’t financially independent, 75% say they’ll eventually get there. In other words, even though they may be leaning on mom and dad for now, they’re confident it’s just a matter of time before they spread their wings and fly. Parents are similarly optimistic, with 72% saying they think their child can, eventually, achieve financial independence. 

And that optimism is great — but if you’re a parent in the throes of continuing to support your adult child financially (at the same time you’re trying to pursue your own goals, like saving for retirement), you might be wondering: How do we give them a little nudge? Here are four of the best ways to cut the financial cord and help the young adults in your life find financial independence. 

Understand the cyclical nature of what you’re doing 

If you’re helping your children with their finances to the detriment of your own (like giving them so much money that you’re forced to put your own retirement savings on hold), it’s more likely that your children may need to step in and help you down the road, perhaps with costs for long-term care. This may be likely to happen at the point when they’re trying to launch their own kids, which could be an insurmountable burden. So, ask yourself: Am I better off pushing my kids to be more financially independent now so that I can be more financially independent later?

Offer help with information — not with cash 

Sometimes what your children actually need most is advice about how to make their financial lives function better. Thankfully, there are steps you can take to guide your child without opening your wallet that will help them get closer to financial independence. For example, you can help them make a budget, track their expenses, or figure out how to sign up for the new student loan repayment program so they can maximize their monthly outlay. At HerMoney, our bestselling book “How to Money” offers an excellent guide for young people just launching their financial lives, and for those looking to dive a little deeper, we have a dedicated young adult version of our popular FinanceFixx course starting February 26th. During this 8-week course, your kids will get the kind of money makeover that can start put them on a path to lifelong financial independence. 

If your children are younger, think ahead

We know that a big roadblock standing in the way of adult children becoming financially independent is student loan debt. The very best way your family can minimize student loan debt is to stop it before it happens — this can be accomplished when you choose a school that provides good value for the money. In other words, look at schools that are willing to give your child a decent amount of aid in the form of grants and scholarships, or look at community colleges. For example, doing two years at a community college and then transferring those credits to a four year college can cut the price of overall college tuition in half. All of this translates to casting a wide net when applying, and thinking outside the box when it comes to higher ed. 

Start gradually 

Today, more young adults from the ages of 18-24 live with their parents than in the past, according to the Pew Research Center. However, 72% of young adults who still live at home with their parents say they contribute financially to the household in some way. This could be by covering the cost of groceries, helping out with utility bills, or even the rent or mortgage. If you have adult children under your roof who aren’t kicking in their fair share, it’s time to sit down with them and go over your own household budget. Identify ways that are realistic for them to contribute — not just to reduce your own expenses, but most importantly to get them used to being responsible for a monthly household expense.

Set some limits 

Whether your child is living with you, or whether you’re giving them a particular sum each month or paying certain bills, it’s time you establish a roadmap for exactly how long this support will continue, and in what way you’d like to phase it out. Be above board with your kids about your needs and plans, so that they can develop their own strategies and best practices for financial independence. It may seem tough at first, but with you to guide them along the way, there’s nothing your little big ones can’t accomplish.


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