How Much Should You Help Your Adult Children

The world of wealth management is filled with stories of inherited wealth ruining people. There’s something infantilizing about not having to figure out how to earn a living. Earning a living is a hard nut to crack: what can you do that people will pay money for? Money sufficient to get an apartment, food, and health insurance, in addition to a car, cellphone, vacations… 

It’s a huge rite of passage to conquer this quest. It’s hard! So hard, that some people will never make it through no fault of their own – illness, intergenerational poverty, racism, living in a failed state – these are serious impediments, and I don’t mean to diminish the challenge at all! Figuring out how to Adult is a big accomplishment.

A grandmother taking a selfie with her graduating grandsonSo what is there to do when your kids aren’t succeeding despite not having any major impediments? They can’t get a job because they don’t have a car, and they don’t have a car because they don’t have a job? When they age-out of being covered by your health insurance and haven’t figured this out? What do you do?

There’s a decent filter to use on this. Help them with capital expenses only, but never pay operating costs. Give them first/last/security on their apartment if you’re able, perhaps even help them buy a car. But don’t pay their insurance, their gas, or their repairs. Don’t pay their groceries or their health insurance or their rent. Relieve them of student loan debt if you can, but don’t buy them a house. 

The challenge of learning how to earn money is a great big problem each adult has to solve, and being hungry and unable to buy gas is a good impetus for doing the unhappy work of tackling this challenge.

However, it is a good idea to pay for their vacations with you, and certainly buying their food when you’re eating together is a fine idea. After all, your goals with your money will inevitably include spending as much time with them as you can.

This policy is built on years of studying generational wealth and the damage it does to the people receiving it. It makes sense if you think about it. Did you ever go to the grocery store with a calculator, knowing exactly how much was in the bank that you could use for this trip? I remember those days: watching for spaghetti sauce on sale, buying rice and dried beans and fruits and vegetables from the sale table. I discovered an enduring desire to buy groceries every week, one that served as a major impetus for me to get a job, that led to a better job, that led to even a better job.

Just for grins and chuckles, here is my own work history:

  • At 15 I discovered I had a phone bill to pay and I needed money. I got a job as a carhop at an A&W making $1.30/hour before “tips” (that I don’t recall being significant).
  • At 17 I worked as an office assistant in a business my step-mother also worked in.
  • At 19 I worked as a research assistant for an astronomer.
  • At 21 I worked as a grocery store clerk in a downtown bodega, selling coffee and cat food, toilet paper and cheap booze to people in between their grocery store runs. I also worked as a research assistant to an astronomer, but had two jobs.
  • At 22 I moved and took two jobs: one as a register clerk at a discount grocery, Price Chopper, the other as a store clerk at Waldenbooks. I job-hunted the entire time.
  • At 23 I got a full-time career-track job in computer support. When I got that job, I dropped the Price Chopper job but stayed at Waldenbooks for several more years. I also took classes.
  • At 24 I found a better full-time job than the one I got at 23 and moved up in my career-track job into software engineering. I still worked part-time at Waldenbooks.
  • At 27 I picked up a part-time job working at H&R Block, sort of as the lab portion to the tax prep class I’d taken just so I’d understand how to do our own tax return.
  • At 29 I was laid off and got a part-time job in a computer support role, while I applied to grad school and parented my small children.
  • From 30 to 33 I was parenting two small kids AND in grad school AND moonlighting doing tax prep from my home.
  • From 34 to 36 I worked in various jobs full-time as a CPA-in-training.
  • When I was about to turn 37, in 2001, I started the first of my own businesses and I have been self-employed ever since.

I’m making good money now, but each job built on the skills from the previous job. It took me from the time I was 15 until I was 22 to get a full-time job, but I couldn’t have gotten that job if I hadn’t had the previous jobs. I wouldn’t feel confident in my ability to solve problems if I hadn’t faced problems. 

I was fortunate: although the child of an impoverished single mother, I had an affluent grandmother who paid for my flute lessons as a child, my trip to France when I was 16, my college wardrobe when I was 18, and who gifted me with the wind beneath my wings when I graduated at 21: she paid off my student loans AND gave me a sturdy used car AND bought me a computer (in 1986, that was a big deal). 

This is an enormous privilege and I am deeply grateful for it, but all it did was remove barriers to success for me. I still had to figure out how to feed and shelter my adult body with the capital created by my grown able body and my trained healthy brain.

I tell this story as an illustration because I think it does a good job of showing what success would look like. I have plenty of stories about what failure looks like, as well, but I think we all do better when we can imagine success, don’t you?