Advice | When it’s time to financially cut off your adult children (2024)

FAQs

Advice | When it’s time to financially cut off your adult children? ›

Go for a Gradual Change From Financial Dependence to Financial Independence. Don't cut the financial cord in one day. Give your child some notice, such as a month or two for cell phone bills and maybe six months to move out, and let them know you're not going to be paying their bills anymore.

The time to stop is when the adult kids aren't putting in proper effort to better themselves or their situation. Too many parents start helping and their adult kids continue to make bad decisions which contribute to them needing help.

In order to decide when to cut the financial cord, ask yourself these questions: Are your adult children capable of supporting themselves? Have your children reached milestones in which they no longer need the same help anymore? Examples include graduating from college or getting a full-time job.

If helping your adult child is sacrificing your financial well-being, that's not good. I get it. You want to help your child, who may be struggling with student loans and/or high rent. But coddling them too long at the expense of your financial security eventually may shift a burden to them.

Leave a Trickle, Not a Lump Sum

One fairly simple way to control the flow of money to a child is to set up a trust and direct that the money be given out in installments—for example, one-third at age 25, one-third at age 30, and the rest at age 35. Or payments could be made yearly—it's up to you.

A rule of thumb when it comes to lending a hand to adult children is to make sure the added expense doesn't impede your ability to meet your own financial goals. Of course, every situation is different. But it really comes down to whether you have the resources available to support your kids' goals as well as your own.

The Bible strongly encourages us to care for members of our family especially older people, children, and those who may be in need. I Timothy 5:8 says, "Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever."

If they are engaging in self-destructive habits, help them instead to find ways to manage money better and make the most of what they do have. Connect them with someone to help them create a realistic household budget to stop the overuse of credit.

How do you cut an adult child off financially? ›

Go for a Gradual Change From Financial Dependence to Financial Independence. Don't cut the financial cord in one day. Give your child some notice, such as a month or two for cell phone bills and maybe six months to move out, and let them know you're not going to be paying their bills anymore.

Tell them you have your own life and expenses. Tell them they need to make their own money and live their own life. Ask them why they are wanting money from you and why they don't have their own. Budgeting and being financially responsible is honestly not that difficult!

Reducing potential taxes with gifts

For smaller gifts, the IRS rules for 2024 allow any individual to gift up to $18,000 per year to any recipient without having to consider the potential impact of a taxable gift. A married couple may give up to $36,000 to any individual.

If assisting someone else is overtaxing your time, energy, or resources—stop! Even if you agreed to do something, if the cost becomes too great, whether that's financial or emotional, you can back out or adjust how much you can help. If you are harming yourself, that is not helping.

65% of parents give their adult children (ages 22-40) some kind of financial support. Of those who support their over-age-22 offspring, the average monthly amount is $718.

Kids and parents often have different ideas about when support should stop. In the Money poll, parents helping adult children generally believed kids should be independent by age 25, but acknowledged that in their own situation, 30 was more likely. Young adults put those ages at 27 and 32, respectively.

There's no one-size-fits-all answer to this question. Some people begin covering all their own living expenses starting from age 18. Others become financially independent in their 20s or 30s.