Helping Your Kids Without Going Broke


There’s a popular proverb about the difference between giving someone a fish and teaching them to fish. Giving them food cures their hunger in the short term. Helping someone by teaching them to fish provides a solution they can use to feed themselves anytime.

You can apply this principle to help your kids financially, too. Many parents feel caught in a cycle of giving their children money — often well into adulthood. But giving money freely is not necessarily the best thing for them — or you.

According to a recent survey, half of Americans say they have helped their adult children with money at the expense of their own retirement savings. And, providing your kids with unending financial support can actually hold them back from taking ownership over their lives.

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How can you help your kids without going broke? Start with these tips.

Help Your Kids Become More Financially Literate

Talking about money with your kids is free. Having conversations about personal finance — even if they feel awkward at first — is a great way to help your children boost their financial literacy. As a parent, you’re in a position to educate your offspring about topics like credit scoring, budgeting, the benefits of compound interest, building an emergency fund and saving for retirement. This form of help could be as simple as texting them a link to a money management app or YouTube video.

Another option is helping your child connect with professionals who are equipped to help — like a credit counselor at a non-profit agency. If your child has been repeatedly asking for money to help pay off major debts, you could instead help them explore settlement and consolidation services offered by an organization like the Freedom Financial Network.

See the difference between being there for your kids and continuing to financially support them to your own detriment? Help your children understand and investigate their options rather than cutting them a check every month because you feel responsible for their wellbeing.

Bundle What Expenses You Can

You may be able to save your children some money each month by keeping them on your family cell phone plan, as well as your health and auto insurance. They should still pay you for their portion of the bill, but you’ll be doing them a favor by helping them save a few bucks (or more) each month through bundling.

Learn to Set Healthy Boundaries

If you’re currently supporting your child financially to some degree, it’s unrealistic to expect they’ll become self-sufficient overnight. Avoid springing this news on them like it’s a punishment. It’s all about healthy boundaries. Setting a time frame and clearly communicating it to your children will give everyone ample time to adjust.

Say you’re currently giving your children about $500 per month to help out with bills. You’ve crunched the numbers and you know you really need to redirect that money into your retirement account so it has time to grow. You might decide to sit down with your child and tell them that you’ll be decreasing that amount by $100 per month until it’s down to zero. At that point, they’ll need to be able to stand on their own two feet financially. But the bright side is that they have six months to come up with a plan.

Look for Non-Monetary Ways to Help

There are many creative ways to help make your children’s lives smoother without having to pull out your pocketbook. Host dinner once per week or bring over some freezable home-cooked meals every so often if you live nearby. Volunteer to babysit or pet-sit for your kids, free of charge. Turn cash gifts into a sporadic surprise rather than an expectation every holiday.

Remember: You don’t have to choose between helping your kids and looking out for your own financial wellbeing. It’s all about setting boundaries and helping in long-term ways rather than continually handing them money.


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Helping Your Kids Without Going Broke
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