Why give your adult children money?

When children leave home, get jobs and have children of their own, many parents breathe a sigh of relief – they can stop spending on the kids and start looking at the kinds of things they would like to spend money on. Learning to manage money is a crucial life skill and there is nothing like ‘going it alone’ to fast track the lessons.

However, when you see your children working really hard, there are some things a parent may choose to do, to help out financially. Please note, this is a choice, and older parents should never be compelled to support their children financially. It should be a gesture that makes you feel good, rather than under pressure.

Life is incredibly expensive nowadays. Granted, younger people don’t often go without, but then life is different. Can you imagine life without a mobile phone or internet connection? Rents and mortgages are astronomical compared to most incomes (particularly in cities) and costs like travel and childcare can really eat into an income. Study now costs an enormous amount more than it did ‘in our day’ as well.

• To keep in touch with children living far away, some parents may choose to pay the travel costs to have their children visit. Young families cannot always afford air travel, but long drive times can make weekend visits impractical. This helps keep family bonds tight.
• Health insurance can be a significant cost, but depending on the provider, there can be discounts and benefits to buying for an entire family and spreading the cost. This is a practical way parents can help out financially. The same goes for mobile phone and internet plans.
• It’s fun to go shopping with your children sometimes and subtly buy an item that you know they would love, but their budget doesn’t allow. A little treat from time to time does wonders!
• Unexpected expenses come up from time to time – rather than putting these (for example car repairs) on credit, parent can offer no interest loans to their children to help them out of a tight spot. Always agree on a repayment plan and time frame and stipulate when it is a loan versus a gift, to avoid misunderstandings.
• Paying for family occasions, or a portion thereof (like the drinks bill) is a nice gesture if you haven’t seen each other in a while.
• Matching or topping up student loan repayments, even by  a few dollars can drastically reduce the term of the loan.
• Paying for dance or swimming tuition for grandchildren may allow them to discover new passions – there are so many opportunities children can explore, but not all parents can afford them.
• If you’d rather not give money – are their skills (like gardening) or actual products (fruit, vegetables or baking) that could be appreciated?

Offering practical day to day help is often more useful than keeping it for an inheritance. Ensure that any help given is divided fairly among children, to prevent family disharmony. Again, any help you give should be within your means and not coerced, but from an ice cream to a leg-up with a loan, it is the nature of parents to try and help their kids where possible!