If you're a parent giving money to your 20-something or 30-something child, you're not alone.
A 2015 survey from the Pew Research Center found that 61 percent of United States parents have supported their adult children financially.
"I think most parents have a desire for their kids to have a better life than what they had," said Tami Sytsma, Registered Principal and Financial Strategist of Sytsma Wealth Strategies in Grand Rapids.
"There used to be a deadline in parents' heads—age 18—when a child was supposed to start fending for themself. At that time, if they wanted to go to college, many could work part time and pay for it. Today, this is impossible. Many parents don't want to leave their children with such a heavy burden—graduating with debt to start their lives—that they put the burden on themselves."
That burden is a classic opportunity cost, and it has both short-term and long-term effects. Not only are parents potentially missing out on current hobbies or lifestyle they enjoy, but by investing in their children's future, they are diverting funds away from their own futures—especially retirement.
It's time for parents to start cutting kids off. That doesn't mean, however, there aren't other ways for parents to offer support. Adult kids are still kids, after all. Parents pour a lot of time and energy into keeping their kids happy and healthy while they're young, and it's hard to watch them struggle sometimes once they're older.
Rather than enabling adult children, though, the idea is to empower them to be financially independent.
Begin teaching financial independence young.
"Every family is different and every situation is different," said Systma, "but kids need to learn the 'cost' of money."
"Start talking to your children early on about money and how to be responsible. One of the things that surprises me lately is the number of young adults graduating college who have never had a job. They haven't learned how to be responsible for themselves, or understand what it costs to provide for themselves or others."
Once kids are old enough, encourage them to find a part-time job or build entrepreneur skills by finding a service that's needed in their community. (Think outside of the lemonade stand—although it might be something like scooping dog poop.) Even when kids are younger, only give an allowance in exchange for chores.
Teach them how to save and budget their income by opening a savings account and discussing what they are expected to pay for—now and in the future.
Help with financial planning.
Give your kids 20 bucks, they eat for a week or two. Give your kids a lesson on budgeting, they eat for life.
Sit down with adult children and talking through basic monthly expenses, including cellphone charges, credit card debt and car insurance. If you're feeling generous, you could also pay a financial planner to help them map out their short-term and long-term financial goals. Otherwise, websites, such as mint.com, are great tools for budgeting, tracking bills and keeping tabs on credit score.
Let them take on the burden.
Allow your adult kids to take out loans and sign up for credit cards in their own name. Debt is a burden, but paying off debt helps build credit that will help with future investments, like purchasing a home or car.
Consider other means of support.
It's true: The job market in the United States isn't necessarily at its best, and student loan debt tops credit card debt. You don't have to make student loan or rent payments for your kids, however.
If anything, allow your kids to move home—but don't sacrifice too much. In case they become too comfortable, put a time restraint on how long they're able to live at home,. And it's reasonable to expect them to contribute to household responsibilities, such as cleaning and making dinner, while they're living under your roof. Additionally, since they're not paying rent, make it clear they're expected to cover other costs, such as cellphone payments and car insurance.
Let mistakes happen.
"I encourage parents to empower kids to make their own decisions and allow them to make mistakes," Systma said.
"Struggling early in life can teach good principals."
Let kids make their own decisions regarding career paths and where they decide to pool their income. Life isn't always comfortable, and it's important for them to learn how to live within their means.
Written by Cassie Westrate, staff writer for West Michigan Woman.