How to Help Grown Millennials Grow Up

For today’s college graduates, an entry-level professional job, shared apartment, and other totems of early-20s life sometimes come with a backstop: financial support from Mom and Dad. But most parents who can afford to provide this assistance must nevertheless wonder how they can dial back the funding and help their kids learn to support themselves. 

“It’s so much better if you can get your kids to be financially independent and then if they do inherit something, they’re much better prepared to inherit it,” says Linda Davis Taylor, the CEO of financial advisory firm Clifford Swan Investment Counselors in Pasadena, California. 

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In one New York City–area family, a teen daughter was accustomed to having a credit card “for emergencies” that she was tacitly allowed to use for purchases like restaurant meals with friends. As the girl was preparing to graduate from college, her parents had her meet with their financial adviser, Jennie Sowers of New York City–based Kore Private Wealth, to work out a budget. Sowers discussed choices the girl would have to make: she would no longer be able to afford a personal trainer, so she would have to choose a less-expensive gym membership, or perhaps just go for runs in the park. The parents knew the girl’s entry-level sales job wouldn’t cover much more than rent in Manhattan, and they were willing to help her financially as she started her career, but they wanted her on a path to self-sufficiency, Sowers says. 

“When she graduated from college, she had no clue about money, but now, two years in, we’ve steadily lowered the amount of the support” she gets from her parents, Sowers says. 

In previous generations, even wealthy parents often stopped providing cash to children once they became adults. Today’s families, however, often underwrite rent, a cell-phone plan, or other expenses at the beginning of their children’s adult lives—but only if they feel that their offspring will eventually wean themselves off the financial lifeline, Sowers says. 

Every parent has his or her own ideas about what help to provide. Some don’t want their kids to live in neighborhoods they consider dangerous; others consider gym time essential. “It starts with a conversation with the parents about what they want for their kids,” says Sowers, whose clients frequently bring her these dilemmas. 

While parents may have strong philanthropic values and be proud to see their children aspiring to careers in save-the-world fields like social work, environmental activism, and teaching, they typically still want their kids to understand that these jobs won’t allow them to afford the lifestyles they’ve had. 

Financial advisers also see the opposite situation: parents who fear their social status will take a hit if their children appear to be downwardly mobile. 

In either case, frank conversations about what Mom and Dad expect and what they’re prepared to pay for should start early, when a child is choosing a college major. “You can’t force kids to be investment bankers if that’s not their skill set, but if they’re choosing among a variety of programs, they can pick one that will make them more competitive,” Taylor says. A psychology major, for instance, could take courses in data science and statistics, which could be useful for a career in marketing or academic research.

For grown children who haven’t found their way onto a career ladder, Taylor recommends a business-style family meeting to talk strategy. When you sit down with your children, discuss their skills and talents, and consider whether they might need career or psychological counseling. Have frank conversations about their college major or graduate degree, and whether it will lead to a job or whether they’ll need to pursue additional studies or a professional certificate. Be clear about what exactly you’re willing to fund and for how long, Taylor says. 

Set deadlines in advance if you want to pull back on making financial transfers to your children, she adds. Let them know, for example, that six months from now they’ll have to pay their own cell-phone bills or that next year they’ll have to cover a certain percentage of their rent. 

If you have reached your limit and no longer want to make financial gifts to your grown children, consider setting up a family “bank,” Taylor adds. “If your children want to apply for additional support for specific reasons, to help through a rough patch, they can apply for a loan with an agreement about how and when they will pay it back, just as they would do if they borrowed from a financial institution,” she says.

“Helping with the basic necessities of life feels different than providing an unlimited credit card to go shopping at Barneys,” says Christine Whelan, a professor who directs the Money, Relationships & Equality Initiative at the University of Wisconsin-Madison’s School of Human Ecology.

One expenditure that’s worthwhile to many parents is family travel. While they may balk at sponsoring their kids’ trips with friends, they’re eager to foot the bill for their kids, kids’ spouses, and grandkids to join them. 

“Some parents will say, ‘What we value now is being together, so once a year we want to have a multigenerational family trip, which is a luxury, but it’s also keeping the family connected,’” Taylor says. 

One client recently called to alert Sowers to expect financial outflows when she pays for her children and their spouses to join her in Bermuda. “This woman wants to spend her money creating experiences with her kids and so she provides that,” Sowers says. 

Should kids always accept money from parents? It depends. From the children’s point of view, it may be valuable for them to say no to parental help, says Whelan. Not taking money from their families means they get to direct their own choices in life without giving their parents a veto, even if their standard of living goes down, she says. 

“The unfortunate dynamic we don’t like to recognize in our family lives is that money is power, and if parents provide the money, it keeps them in charge,” Whelan says.

It may make sense for families to pay for vacations together, for tuition and healthcare, and for essentials like rent if the grown children are in jobs where they can’t afford it. Families may also want to put their money toward helping their grown children spend more time with their own kids—for instance, by paying for them to hire a housekeeper. But extravagances are the grown child’s purview, she says. 

“Funnel your resources toward joint experiences and making sure basic needs are covered around education and health,” Whelan says. “After that, they should be on their own.”