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How to Stop Your Adult Child From Ruining Your Retirement

Author: Compare Guru
Date: 2016-10-24
The movie Failure to Launch provides a comical take on an adult child living at home. This, however, is a common problem many parents face.
Is your adult child still living at home and not contributing financially? They could be eating away your well-earned retirement. debt review Adult dependency has been on the rise and is a common problem due to a number of reasons. As your child starts out in their careers, they may take on apprenticeships, internships and assistant jobs which offer a pay that is, let's face it, criminal. Another possible reason for adult dependency could be the rising costs of accommodation as well as inflation. This affects food, fuel and other essentials. With low pay and rising living costs, it's a matter of, "when the going gets tough, the tough gets going," and the rest simply wither and rely on their parents.

Why Are Dependent Adults Leeches?

adult-child As your young adult ventures out into the job world, a couple things will certainly change for them, including the type of lifestyle they are used to. Ultimately, they must thus learn to budget, save, and buy affordable consumables. Young adults (and students) will have first-hand experience at how to make a shoestring budget work. Mark MacSymon, a certified Financial Planner and Wealth Manager at Private Client Holdings says adult children who continue to live with their parents into their late 20’s and 30’s often fail to share in everyday household expenses. Some adults may still receive a regular income from their parents to help with expenses. As a result, these adult children may become:
  • Less budget-conscious - as all their needs and some wants are met.
  • More frivolous with their money - there is no need to save for essentials.
  • Maintain the same lifestyle habits - possibly even increase these as they are receiving assistance.

What Are The Habits Of More Independent Young Adults?

Young adults who are independent and rely on very little to no assistance from their parents often have the following qualities:
  1. Critically assess income streams that have high potential and can increase after a period of time.
  2. Have a hunger for self-betterment and new job opportunities.
  3. Maintain an attitude of working harder and smarter in order to enhance their future.
  4. Have a desire to take on more responsibility in order to enjoy a potentially higher salary and to be viewed more favourably by potential future employers.

How To Make Your "Failure To Launch" Adult Child "Hit The Road"

A simple way is to sit down with your child and explain all their monthly expenses and how it is affecting (and slowing) your approaching retirement date. MacSymon advises against a simple, "No More!" strategy and encourages more of an added responsibility strategy. Retirees and young adults need to rationalise their current financial spending flow patterns in order to make a change. A good financial planner will be able to assist with cash flow models which demonstrate the long-term effects of an adult child's financial behaviour on their parent's retirement capital. This may prove useful when attempting to change the behavioural patterns of both parents and their dependent children.
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As mentioned above, severing all financial ties is unlikely to solve the problem, but introducing a gradual slowing of financial support over a defined period of time will allow both parents and children to adjust. To make sure your children grow up to be more financially independent, it is vital to entrench money-saving tips as soon as possible. Making your children financially independent starts by letting them manage money at a young age in order to understand the true value.

Building Financial Independence Starts By:

  1. Your children receiving an allowance for performing chores and duties.
  2. Encouraging them to set financial goals.
  3. Encouraging then to work towards something they want, by saving up and using their earned money to finance it.

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