Setting Financial Boundaries with Adult Children

According to a report from earlier this year, “Half of parents with adult children provide regular financial assistance to their grown offspring. The average support per adult child is $1,474 monthly, about 6% higher than last year.”¹ When you work hard to build financial security, it’s natural to want to help your children find the same freedom. But at what point are you crossing financial boundaries?  

We’ve witnessed clients who repeatedly fund an adult child’s lifestyle choices, with each transaction promised to be “the last time.” Without clear boundaries, this pattern can continue indefinitely, potentially threatening your ability to maintain your standard of living without financial worry and jeopardizing the retirement lifestyle you’ve planned and worked toward. Here is why and how to set financial boundaries with adult children. 

Often, clients get a wake-up call when they see projections of how continued financial backing impacts their retirement timeline and funding. When boundaries aren’t established and maintained, generous parents can inadvertently undermine their intentions and become financially dependent on their children later in life.  

Life’s uncertainties add a layer of concern. Unexpected medical expenses, job loss, or market downturns can negatively impact your financial plan. When you’re already supporting adult children financially, it’s more difficult to navigate these challenges.  

Without proper planning and a commitment to financial boundaries, situations become unrecoverable. We’ve seen parents with accounts on track to be depleted in a few months, but they maintain a defeated, “I don’t care” mentality that perpetuates the problem and impacts both them and their child.  

Beyond the immediate financial drain, unlimited support creates deeper issues: 

For You: 

• Compromised retirement security and delayed financial independence 
• Stress and resentment about saying no to your children’s requests 
• Potential inequality among your children, creating family tension 
• Dismissed financial goals that take a backseat to your kids’ immediate needs 

For Your Children: 

• Stunted development of important financial life skills 
• A sense of entitlement rather than personal responsibility and achievement 
• Strained relationships with siblings who may receive different levels of support 
• Reduced self-confidence and independence that comes from personal accomplishment 

Setting financial boundaries requires following a caring approach that benefits the long-term well-being of your entire family.   

Consider the BRIDGE method of establishing sustainable support: 

B – Baseline Assessment: Honestly evaluate your current financial dynamics and their impact on both you and your children. 

R – Relationship Preservation: Design boundaries that strengthen family relationships while promoting independence. 

I – Implementation: Establish clear guidelines with specific timelines and expectations. 

D – Documentation: Create formal agreements that clearly outline expectations and consequences. 

G – Growth Tracking: Monitor progress and adjust guidelines as circumstances change. 

E – Emergency Protocols: Define criteria for when boundaries might be temporarily adjusted during genuine crises. 

Every family’s situation is unique. While the BRIDGE method outlines how to build boundaries, these three frameworks help you pick the kinds of boundaries and support that will work based on your children’s circumstances and your financial capacity: 

Best for: Children who face an unexpected crisis but are otherwise independent. 

Set aside a maximum giving amount for true emergencies, like unexpected medical bills, job loss, or car repairs. Consider structuring your financial contributions as interest-free loans to provide accountability.  

Best for: Children working toward independence who need temporary assistance. 

Start with a set amount of support and decrease your giving strategically over time based on specific milestones or timelines. Ask your children to provide evidence of their progress, like job applications or a budget.  

Best for: Children who require permanent assistance due to disabilities, chronic illnesses, or other ongoing, uncontrollable challenges. 

Create sustainable parameters that provide what’s needed without overextending your resources. Consider using a third party to administer funding and provide impartial advice. Focus on providing for essential needs rather than lifestyle expenses. 

Setting financial boundaries today creates stronger, healthier relationships for tomorrow. Your children will develop crucial life skills, gain confidence from their achievements, and ultimately respect the wisdom behind your approach. Most importantly, you’ll maintain the financial freedom to enjoy the retirement you’ve earned while being the attentive parent you want to be. 

The goal is to create sustainable support that allows everyone to thrive. When you protect your financial future, you can be a resource for your family for years to come.  

To build personalized financial boundaries that work for your family, contact us using the form below.