As a parent, you want to see your children thrive — both personally and financially — regardless of their age. When your child transitions to adulthood, it’s likely they will need some sort of financial support, like or housing or help with an unexpected expense. According to Statistics Canada1, nearly 35 per cent of adults aged 20 to 34 still live with at least one parent.
While occasionally providing financial help for your child may be feasible, consistently giving support may lead to financial stress or feelings of resentment. It can also lead to situations of emotional or financial abuse or children expecting constant financial support.
Setting clear boundaries with your adult child can help them build their financial independence and avoid situations that may lead to financial abuse.
This guide offers practical steps to help your adult children take control of their finances and build the financial skills they need to be independent.
Step one: Have an open conversation
Sit down with your child and have an honest talk about becoming financially independent. Discuss what financial independence looks like for them and set clear goals and steps for how they can get there. Having discussions about money can be uncomfortable but remember that what you are doing will benefit both you and your child in the long run. If you feel vulnerable having these conversations with your child, ask someone you trust to join you during the discussion.
Step two: Create a plan to wean off support
Together, develop a plan with specific financial milestones for them to reach. During this transition, gradually reduce the financial assistance you provide so they can adapt and learn. For example, if you’re currently paying their rent, you might start by paying the full amount for a month or two and gradually reduce your support to 75 per cent or half.
Step three: Support them in other ways
Financial independence isn’t just about money—it’s also about knowledge. Encourage your children to learn about budgeting, saving, investing, and managing debt.* Share your own experiences and lessons learned about money management, setting an example through your own financial decisions.
You can also offer non-financial support. For example, you may occasionally help with childcare for grandkids instead of giving your child money. Always set clear boundaries around how often you are willing and able to offer your help.
Step four: Let them make mistakes
The ultimate goal is for your child to take control of their finances. Your role is to be a guide and mentor, not to manage their money for them. Encourage them to make their own financial choices, even if that means letting them learn from their mistakes. Sometimes adult children may feel a sense of entitlement or emotionally manipulate their parents into thinking providing financial support is “what family does.” Remember, how you spend your money is up to you. If you are uncertain about your decision to stop financial support, seek reassurance from someone close to you who understands the situation, like your financial professional or a close friend or family member.
Step five: Protect yourself from financial abuse
The journey to financial independence is not always easy and often parents feel a sense of responsibility to help their children succeed. Remember that your child’s financial success is not up to you. Repeatedly helping your child can be detrimental to their growth and may lead to financial abuse. Avoiding situations that make you vulnerable to financial exploitation is a great step in protecting your retirement and ensuring you have enough money to last through the years.
For more tips on protecting yourself from financial abuse, fraud and scams, check out our free e-learning course, Financial Exploitation: “The invisible crime of the 21st century.”
*The Commission has resources on budgeting, saving, investing and other topics.
1Statistics Canada. (2022, July 13). Canada's population estimates: Age and sex, 2022. Retrieved from https://www150.statcan.gc.ca/n1/daily-quotidien/220713/g-a005-eng.htm