One in 10 parents have taken on a second job in order to earn enough money to financially support their children.
The same study shows 75% continue to financially support their children after leaving home. A lot of these parents will now be worried about their own financial futures.
With the cost-of-living crisis and Covid-19 thrown into the mix, many grown-up- children have had to rely on their parents more than usual.
Cost-of-living impact bigger than Covid
According to Saga Analysis, 64% of parents expect the current cost-of-living crisis to have a greater impact on their adult children’s finances than Covid-19 due to rising bills, a lack of savings and increased rent and mortgage rates.
Some adult children have relied on their parents financially throughout their lives, creating a knock-on effect for the future. When children haven’t been expected to save money, build credit or in some cases be financially independent, it can come as a shock and many won’t have savings to support them in the future.
Of course, we want to support our children whenever we can – such as helping them at university. But there also comes a time when we must decide if this is the best thing not just for them, but for our own financial situation.
For many parents, it may seem like a good solution to take on second jobs, go back to work, dip into pension pots or delay retirement. It’s important to decide how best to support your children – and yourself. This may mean reducing or even stopping your financial support.
Withdrawing such help can be stressful and put a strain on relationships.
Many grown-up children will genuinely need that financial support, so it is important for parents to set boundaries, where possible, particularly with children who have never been financially independent and may be resistant to the idea.
Here are my top tips if you’re unsure when to stop providing for your children financially:
- Have an open and honest conversation to understand their circumstances and if they still require support
- Explain your own financial situation and that this is something that you may not be able to continue
- If applicable, explain to them that you can no longer return to work or take a second job to fund their lifestyle
Offer support in other ways
- If your child has just finished university, college or school and is unemployed, offer support to help them find work if they are struggling with what to do. This is a good way to introduce financial support and responsibility to them if needed
- If they lack understanding with budgeting and are struggling with their own household bills, offer to guide them. This can make a significant difference if they are unsure of best solutions – such as how to budget, save and set up direct debits for bills
- For children studying away from home and needing financial support for accommodation, make use of available grants, if possible. This may help ease the financial pressure
Consult a financial planner
- If you are worried about the effect supporting your children financially may have on your own finances long term, speaking to a financial planner may give you peace of mind and help you to decide if it will have a detrimental impact on your current and future standard of living
It can be tricky having these conversations and deciding to no longer support your children financially. But in certain situations, if it carries on too long, it may impact not only them for the future but also you.
Alana Davidson is a chartered financial planner at north-east firm Acumen Financial Planning.