According to Financial and Law Specialist Sam Tabar, nothing is more difficult than trying to find that thin line between helping your child or hurting yourself. It’s emotionally exhausting trying to figure out which apron strings to cut and which ones to leave intact. One of those strings to decide on is the one that helps your child pay their bills. When is the best time to let go?
A survey done by Fidelity asked millennials between the ages of 25 and 35 some questions and the results were remarkable. It concluded that 47% stated that their parents have assisted in paying some of their bills from the moment they began living on their own. The largest percent being their cell phones at 21%, then groceries at 20%, clothes at 16%, utilities/ entertainment at 14% each and lastly, rent/mortgage at 12%.
What does all this mean for both the kids and their parents? The Federal Reserve reports that half of all Americans have $400 or less in savings, while the surveyed millennials had an average of $9,100! Even more baffling, over half of the millennials have investment and retirement accounts indicating that they are thinking about their future. That’s a noble thing, however it appears that it’s at the parent’s expense; they may be sacrificing while their children prosper. Will the parents have their own retirement savings to live on or will they give it all away to their children?
Parents who find themselves between this rock and a hard place need to take a genuine look at where they are when it comes to their own retirements. A small percentage of parents may be wealthy enough that helping their children is not taxing on their wallets at all. However, according to the statistics above, half will definitely be wiping out their own nest eggs by continuously helping a child pay bills.
If your child has a steady income, and/or a hefty savings, it’s time to have a serious talk with them about their independence. You can coach them along with your wisdom and give them encouraging pep talks as they adjust, but that’s it. It is now time to cut that apron string.
Sam Tabar presently serves as Chief Operating Officer at FullCycle Energy Fund where he supervises fund management. His mission is to end harmful energy usage and encourage fuels more benign to the atmosphere. Sam Tabar was also previously employed by Merill Lynch, managing its financial strategies.
Standing out among your typical financial guy, Sam Tabar also has practiced law and worked for various firms. He is a well-rounded, wise man that all parents and their grown kids alike, would do themselves much good to listen to.