Updated Wednesday, July 30, 2014 as of 1:17 PM ET
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Helping Your Clients Set Financial Limits with Their Adult Kids
Tuesday, July 23, 2013
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The goal of any parent is to raise a healthy, happy child and launch this young person into the world as a productive adult.  This process takes a minimum of 18 years and sometimes up to 30!  In previous generations, children graduated from high school, went to college, and four years later landed a “real job.”  The onus was on the young graduate to find a job, fund an apartment, and pay for the amenities of life.  However, over the last decade, more adult children are returning to live with their parents after graduation and effectively delaying the transition into adulthood.

Some clients need to be coached on how to set financial boundaries with their adult children.  Some parents see their financial support as love and believe if they withhold it they are being “bad parents.”  They may have experienced these feelings growing up when their parents didn’t give them money and want to spare their children from feeling emotionally abandoned like they did.  Or your clients may still be financially dependent on their parents and view supporting adult children as their duty.  Whatever the reason, it is often healthy for parents to set some financial limits on their adult children as it teaches them important skills that contribute to being financially self-sufficient.

Your clients need help understanding and gaining insight into what makes it so hard to set financial limits with their children before they can curtail or slow down this behavior.  Questions aimed at the underlying motivations are much more effective than showing them scary charts and graphs. Consider these questions instead:

  • Did your parents financially provide for you as a young adult beyond your college or early working years?  If so, what was this like for you as their child?
  • If you could set a limit with your adult child, what would you have to tolerate emotionally?
  • If your financial gifts could talk to your adult child, what would they say?
  • Is there another way of communicating this to your adult child other than financially?
  • What is your greatest fear in not continuing to fund your adult child’s lifestyle?

These inquires cut to the root of the behavior and are aimed at understanding the parents’ underlying motives.  By helping your couple clients examine their mindset around financing their adult children’s expenses, you are opening a new window into their financial habits that may assist them in setting better boundaries going forward.  For some parents, this type of insight is enough for them to act differently with their adult children.  For others, it may be they always provide financial assistance beyond what you see as reasonable.  Remember in the later instance to not judge your clients as ultimately how they spend their money is really up to them.

The couples you advise will go through many life transitions, with many of them welcoming children into their lives and eventually launching them into the world.  Clients need your help navigating both the financial as well as the emotional landscape of these changes.  If you are equipped to offer guidance and support during the ups and downs of life, you will be seen as a valuable travel companion by your couple clients, and they are much more likely to invite you on this life long journey with them.  Buckle up – it is a wild and wonderful ride to go on.

Kathleen Burns Kingsbury is a wealth psychology expert and founder of KBK Wealth Connection, and author of several books including “How to Give Financial Advice to Women” and “How to Give Financial Advice to Couples,” both published by McGraw-Hill.   For more information, visit kbkwealthconnection.com.

(2) Comments
Hi,Kathleen very true it is very difficult to tell client to set limits on spending or helping their kids or young adults.Most of the times as advisers it has to be handled delicately and firmly in favour of our clients.Hope your article is eye opener for many.
Posted by tasha123 s | Thursday, September 05 2013 at 6:33AM ET
It is true that most of the teens/youngsters are more inclined to stay with their parents to save few pennies going out from their pocket, but at the same time parents suffers due to excess requirement of money, because of spending habits of their kids. It is always good to keep a check on these habits to make the kids/young adults realize that it's a hard earned money & should't be wasted in that fashion but at the same time not to let lose the politeness, else the situation may go worse. But handling one's finances is important for a better future.
Posted by KIMMY B | Friday, October 18 2013 at 4:42AM ET
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