When to cut the financial cord on your kids

It's likely that your kids are your pride and joy and no matter what, you'll always be there for them, even if that means financially taking care of your adult child who is well in their 20's. But, what if your financial security blanket is doing more harm than good?

According to Pew Research Center analysis of U.S. Census Bureau data, the number of young adults living at home rose to 36 percent in 2012. This begs the question for parents who want their kids to be confident in their independence: When should you cut the financial cord?

Stacy Johnson, CPA says when helping out your adult kids financially starts to hurt you financially, that's when you cut that cord. Here are a few tips to get started.

1. Have a conversation

Have a serious chat with your adult child about your concerns. Let your child know that you want and expect them to move out. Explain that this is good for them, good for you, and good for your relationship. Be kind and loving, but be firm.

2. Make a plan

Set a cut off date. Give your adult child about 2 months to get their life in order. Some important cut-off dates include: going to college, finding a job, and finally, getting an apartment or a home of their own.

3. Offer help

It should be free help, of course. For instance, babysit if they need someone to cover while they work or hunt for a job. Your assistance can be as simple as providing a reference to their potential future employer. However, if you do decide to help, make sure it doesn't require you to dig into your pockets to do so.

4. Lead by example

There is only so much you can say to persuade them to get their life in order. It's up to you to show them how by your actions.


Share the slideshow below with your child for some easy ways to put more money in their pockets: