15 Expenses Parents Should Stop Paying for Their Adult Children

In today’s challenging economy, financial support from parents to their adult children is more prevalent than ever.

Nearly half of parents still provide financial assistance to their grown-up kids.¹ This support often covers substantial expenses, from housing to everyday bills, impacting parents’ own financial stability, especially their retirement savings.

While it’s natural to help, continuing to cover certain costs can prevent young adults from achieving financial independence. Here are 15 expenses parents should stop paying for their adult children to foster their financial growth and responsibility.

1. Cell Phone Bills

It’s one thing to keep the family plan for convenience, but it’s another to indefinitely cover your adult child’s phone bill. Transitioning this responsibility helps them understand the cost of staying connected.

Moreover, having them pay for their own phone plan can teach them about finding the best deals, understanding contracts, and managing recurring payments. This practical knowledge is invaluable as they navigate other adult financial responsibilities.

2. Car Payments

If your child has a car, they must learn the costs associated with it, including monthly payments. Covering their car expenses can delay this important lesson in financial management. The average car payment is over $550 per month, a significant amount that young adults should learn to handle themselves. (ref)

By taking on this responsibility, they also learn about insurance, maintenance, and the true cost of ownership. These lessons are better learned early to avoid financial pitfalls later in life.

3. Rent or Mortgage

Providing a temporary cushion is one thing, but indefinitely paying for your child’s housing can stunt their financial growth.

Many young adults receive financial support for housing from their parents. They must understand the commitment and planning required to meet these significant monthly expenses.

When they manage their rent or mortgage, they also develop skills in budgeting, saving, and financial planning. These are essential skills for achieving long-term financial stability and independence.

4. Streaming Services

While it may seem like a small expense, covering the costs of various streaming services can add up. Teaching your children to budget for their entertainment is part of financial maturity.

Encouraging your adult children to pay for their own subscriptions helps them prioritize their spending and understand the cumulative impact of small, regular expenses.

5. Credit Card Payments

Helping out with a one-time emergency differs from regularly paying off your child’s credit card debt. This can lead to a cycle of dependency and poor financial habits.

By making them responsible for their credit card payments, they learn about interest rates, debt management, and the importance of living within their means. This knowledge is critical for their financial health and future creditworthiness.

6. Student Loans

While student loans can be a heavy burden, your children need to handle this responsibility. The average student loan debt in the U.S. is around $30,000, according to the Institute for College Access & Success. (ref)

Managing their own student loan payments teaches them about debt management, financial planning, and the consequences of borrowing. It also encourages them to seek out and utilize resources for loan forgiveness or repayment assistance.

7. Groceries

Covering grocery expenses can seem like a way to help, but it prevents your children from learning to budget for everyday necessities.

By managing their own grocery bills, your adult children learn to plan meals, shop smartly, and avoid unnecessary spending. These are essential life skills that contribute to overall financial literacy.

8. Travel & Vacations

Funding your child’s travel or vacations can lead to unrealistic expectations and financial dependence. Encouraging them to save and budget for their own trips fosters financial responsibility and appreciation for their experiences.

It also teaches them about the importance of planning and saving for discretionary expenses.

9. Luxury Items

Covering the cost of luxury items like designer clothes, high-end electronics, or expensive accessories can create a sense of entitlement. Young adults should learn to differentiate between needs and wants.

By paying for these items themselves, they develop a better understanding of the value and the importance of prioritizing their spending. This helps them make more informed financial decisions in the future.

10. Dining Out

Regularly paying for your adult children’s dining expenses can contribute to unhealthy financial habits. Encouraging your children to budget for their own meals fosters better financial discipline.

They learn to prioritize spending and make cost-effective choices. This responsibility also promotes cooking at home, which is generally healthier and more economical.

11. Insurance Premiums

Health, auto, and renter’s insurance are essential expenses that young adults should learn to manage. The average cost of health insurance for a single person is over $400 per month.(ref)

By taking on this responsibility, they learn about the importance of coverage, how to choose the right plan, and the financial implications of being uninsured. This knowledge is crucial for their long-term financial stability and well-being.

12. Personal Loans

Covering personal loans for your adult children can lead to financial dependence and poor debt management skills.

Encouraging them to handle their own loan repayments helps them understand the seriousness of borrowing and the importance of maintaining good credit.

13. Clothing & Apparel

While it’s natural to want to help with basic needs, covering the cost of clothing for your adult children can prevent them from learning to budget for themselves.

By paying for their own clothes, they learn to prioritize their spending, seek out sales, and make cost-effective choices. These skills are essential for maintaining a balanced budget and avoiding unnecessary debt.

14. Subscription Services

Paying for your adult children’s subscription services, such as magazines, gyms, or other memberships, can add up and foster financial dependence.

By handling these costs themselves, your children learn to evaluate the value of services, manage recurring expenses, and prioritize spending based on their financial situation.

15. Educational Courses & Classes

While it’s important to support lifelong learning, consistently paying for additional courses or classes can hinder your child’s financial independence. The average cost of continuing education courses can range from hundreds to thousands of dollars.

Encouraging them to invest in their own education fosters a sense of responsibility and commitment. It also helps them appreciate the value of their learning and motivates them to make the most of their investment.

Financial independence is a crucial aspect of adulthood. While it’s natural for parents to want to help their children, it’s equally important to allow them to take on their own financial responsibilities. By doing so, you equip them with the skills and knowledge needed for long-term financial stability and success.

Disclaimer: This article was written for informational purposes only. Always seek professional financial advice.

Source:

1. cnbc.com study