How to Help Your Adult Children Become Financially Independent

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Are your adult children still living at home? Are you sending checks to your post-college sons or daughters to help them pay their student loans, car payments, or cellphone bills? If so, you have adult kids who haven't yet become financially independent.

It isn't uncommon for parents to help their grown children with money matters. The problem is how quickly this can stunt a young adult's financial independence. If you've been supporting your adult kids financially, you may need to make some lifestyle changes to help your children break away from the comfort of your bank account. (See also: How to Raise Your Kids to Be Financially Independent)

1. Don't bottle up your feelings

Are you frustrated that your adult children eat your food, throw their dirty laundry in your hamper, and fall asleep on your couch in the middle of the day? Express yourself.

You aren't required to help your adult children financially or provide them a free place to stay, and it's understandable if this is making you unhappy. Make it clear that this is only a temporary situation. And while changes aren't likely to happen overnight, a conversation will get the ball rolling. Sit down with your kids and form a plan for how they are going to move toward financial independence over the next three months. (See also: 7 Money Conversations Parents Should Have With Their Adult Kids)

2. Change the expectations

Forming that plan also means setting the right expectations. Explain that your adult children need to do something to earn your largesse. If you are providing them with a free place to live, for instance, make it clear to them that they must do their own laundry, chip in for buying groceries, pay at least some rent, and help with other household chores.

3. Teach them about budgeting

The quickest way to financial independence is to learn how to spend money wisely. Your adult children won't be able to do this if they don't know how to create a household budget.

Help them create a list of monthly expenses; ones that don't fluctuate, those that do, and those that are discretionary. Next, have them list their monthly income. This will show your kid how much money they have coming in, and how much is going out. They can better figure out how much to stash away in savings or spend on rent, if they are ready to move out.

With a budget guiding them, it is far less likely that your adult children will run into the financial trouble that might land them back on your doorstep. (See also: How to Help Your Kid Build Their First Budget)

4. Help them learn how to use a credit card

A strong credit score is essential. Lenders use this number to determine if you can get a loan or credit card, and at what interest rate. Your adult children will need to establish their own credit history to build strong credit scores. And a higher credit score will help them become financially independent.

The problem many young adults face is that they haven't built up enough of a credit history to have a strong credit score. In some cases, they may not have a credit score yet at all. You can help your kids build a credit score by teaching them how to properly use a credit card.

The key is for your kids to pay their credit card bills on time and in full every month. As a parent, you can teach your adult children how important using credit wisely can be to becoming financially independent. (See also: How to Use Credit Cards to Improve Your Credit Score)

5. Teach them about wants and needs

Your adult children might want the latest iPhone. But they don't necessarily need it. Teach your children the difference between spending on necessities — food, rent, transportation to and from work — and on toys such as high-tech smartphones, the latest laptops, and expensive clothes.

If your children are relying on you for financial assistance, they shouldn't be buying the most expensive new electronics and fashions on the market. Make sure your children know that your financial support isn't intended to fund their more frivolous purchases. (See also: 4 Things You Should Make Your Adult Child Pay For)

6. Set limits

If you want you kids to only spend the money you give them on necessities like rent and transportation, make this clear. Determine how much they will need to spend on items such as monthly train passes, rent, or groceries. Only give them the financial assistance they need to pay for these items.

If your adult children want to spend on other items such as entertainment or electronics, they'll have to earn that money on their own.

7. Work up an end date

Finally, set a date with your adult kids for when your financial assistance will come to an end. Helping an adult child financially shouldn't be a lifelong commitment on your part. You might decide, for instance, to give your children six months to find a place to live and a job that pays enough to cover the rent.

Your end date might not actually be tied to a date. Maybe instead, you'll determine that your financial assistance will end once your children find that higher-paying job they need.

However you set it up, make it clear that your financial help does have a time limit. Without one, your kids might not be motivated to move on from your monetary support.

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