6 ways to reduce your child's financial dependence
01/09/2016 by Sammut Bulow
Children are staying at home longer (some well into their Thirties) and their Baby Boomer parents are paying for it.
All parents strive to give their children the best opportunities and support they can, but somewhere in there we as parents have gone from providing opportunities to constantly providing hand outs.
This trend of Adult children living with their parents is becoming 'normal' in Australia and while some parents are frustrated and exhausted from "waiting" for their child to move out, others are happy to provide a home for their child.
Referred to as "failure to launch" children and Boomerang kids (a young adult who returns home after leaving), they are fast becoming typical in Australia and the Western World according to researchers.
Why are adult children still at home?
The phenomenon is caused by a range of financial, social and emotional factors
Never-married or divorced adult children are more likely to live at home
One study found an increased number of unmarried adults could explain the high stay at home rate
"Tenacious" adults are staying at home while they increase the financial base
However, lower income and unemployment increase the change of children not living at home (Source:ABC News)
A lot of the time having your child live at home longer makes financial sense – as long as the child is contributing and paying their own way. However, sometimes parents are sympathetic to their children's needs and continue to provide financial handouts. This assistance can be damaging in the long term, inhibiting self-sufficiency and understanding of money. To avoid these issues, it's necessary to have a plan to help your children.
Consider the following six tips to reduce the dependence cycle and ensure your children learn important lessons about money:
Be clear about how much financial assistance you'll provide