When you have kids, you’re basically signing up to parent them for as long as you live. Sure, you may not have to spoon-feed them at a certain age or pick out their clothing. You may not even have to drive them places. But at the end of the day, you’ll always be the parent — even when they’re grown and have children of their own.
Because of this, you may be inclined to want to support your grown kids financially as much as you can. But recent data reveals that parents today may be going too far.
On average, parents who provide financial support give $1,384 to their children each month, according to a recent survey by Savings.com. And that’s a sum you may be struggling to part with.
But even if you’re giving your grown kids less financial support every month, it could still be hurting your finances — and your future. So you may need to rethink your approach to parenting in this regard.
Can you afford to give your kids financial support?
Maybe you’re someone with a large amount of savings — for both the near term and the future. If you feel confident that you’re perfectly set with regard to your own financial needs and goals, and you have extra room in your budget to help your grown kids, then why not? But if it’s a struggle to find the money to give to your kids, then you really shouldn’t push yourself to offer financial support.
The reason? Every dollar you give your grown kids is a dollar that can’t go into your 401(k) or IRA for retirement. It’s also money you can’t use to pad your own emergency fund. And putting your kids’ financial needs ahead of your own could backfire on you. It could leave you struggling to pay your bills in retirement and racking up costly debt in the near term when unexpected expenses arise.
In fact, let’s say you’re not giving your kids anywhere close to $1,384 a month, but rather, $300 a month. You might think you can afford it because you’re paying your bills just fine without it. But what if you’re 15 years away from retirement?
If you were to put that money into an IRA or 401(k) that generates an average annual 10% return, which is in line with the stock market’s average over the past 50 years, you’d add over $114,000 to your long-term savings total. That’s huge.
There may be another way to help out
Young adults today have it pretty rough. Many are grappling with leftover debt from college and are being forced to take on bills at a time when inflation is still a problem. And let’s not forget the exorbitant cost of paying for child care or buying a home.
You may be inclined to try to help your grown kids financially because of all these things on top of your love for them. But if doing so means giving up money you need for your own savings, then that’s not a great idea. So instead, think of ways you can give indirect financial support.
Maybe your job is flexible while your grown son and his wife both work from an office. If you can be there daily to grab your granddaughter from the bus stop, you can save them the $30 a day they might otherwise have to pay an after-school sitter. Or, if you’re someone who cooks often, you can make extras and bring them leftovers so they don’t have to spring for takeout due to having demanding work schedules and no time for food prep themselves.
These are just a couple of examples. The point, however, is that if it works out for you to support your grown kids financially, then go for it. If not, it really is OK to put your own needs first and find other ways to help out that don’t have you parting with money that you need to ensure your own well-being.
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