Is Economic Support for Adult Children a Good Idea?

If you spend time in a central metropolitan area, you will find high-rise buildings. Sometimes, hanging from the ceiling or standing on top of multiple stories of beams and wood is a collection of scaffolding. While those structures can withstand most weights and circumstances, they are temporary.

Much is the same with “financial scaffolding.”

Think about it: Scaffolding allows people to be elevated and strategically positioned and provides much-needed maintenance on things in hard-to-reach places. When they graduate high school, our children may depend on scaffolding in their financial lives. They need a temporary agreement to get a diploma or a trade as they prepare for a career.

Why? The average student loan debt from college graduates and those who didn’t finish a degree is $38,787. Most financially stable parents want to prevent their students from feeling that burden.

Supporting adult children can be a meaningful experience and useful for their financial future. However, it is vital to be aware of troubling patterns.

End Goal of Independent Thriving

Financial scaffolding could help struggling adult children perform difficult tasks. Living alone (or with roommates) in this economy can be remarkably difficult for someone graduating from college. Supporting adult children or scaffolding their future success is almost necessary for many families, but it should happen with clear discussion and determined direction.

The key to financial scaffolding is understanding that the end goal is for the child to thrive independently. When establishing boundaries for financial support, there must be a beginning and end. This process meets an expectation about what the caretaker and the child are willing to do and not to do.

Timing is essential with a financial agreement. Caretakers must ask themselves how long financial support will last, and the foundation of the agreement has to start with trust.

• As the parent, you have established trust that you’re willing to take care of the child and do what it takes to see them through any situation.
• As a child, you have experienced trust that your shelter, food, clothing, and anything else given to you is a token of their love for you.
• As a family, you both understand—and trust—that every action is done because of love and not obligation.

Trust is more important than ever when scaffolding a child’s financial success, but the interpretation can vary. In this sense, providing money is out of love, but effective boundaries must be agreed upon. A strong support network and great communication can lead to a better bonding experience with your adult child and increased trust.

Structure for Financial Scaffolding

Financial scaffolding involves many things, such as responsibility, accountability, and growth. However, structure is one of the most essential facets of financially supporting an adult child. Economic assistance must be explained, understood, and possibly written down to refer to from time to time.

Crucial to this agreement and the foundation of the financial scaffolding structure is the idea that money is not a power tool in a family relationship but an instrument of love. Have an honest relationship with each other about expectations and responsibilities, whether they are fair and reasonable, and what natural consequences happen if those expectations aren’t met.

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If the child isn’t following the path you envisioned, that is not permission to remove financial support. I once had a client who supported her daughter so she could follow her passion. Although the relationship was turbulent, it was understood that the daughter wouldn’t make much money initially, but there was potential to earn a substantial living. Yet, it didn’t happen as fast as my client assumed, so the monetary support was removed. I told her, “That is a power play, not scaffolding someone you love.”

Expectations of how the money will be used should not be narrow—if you are only willing to pay for a car or tuition, then pay it directly. If you are giving your child money, do it, but acknowledge that they may have different values about spending it. You can't judge them for that action without accountability for the agreement.

Types of Parenting Styles

In her 1967 study, “Child Care Practices Anteceding Three Patterns of Preschool Behavior,” Diana Baumrind, Ph.D., at the University of California, Berkeley, revolutionized how therapists teach parents to create the best structure for their children.

Baumrind Parenting Styles

Source: CNBC

The Baumrind Parenting Styles, as they’re now known, involve four quadrants opposed along two perpendicular axes, as seen in the visual created by CNBC.

On the X axis, there is love and warmth; on the Y axis, there is structure (i.e., limits and boundaries). The best results are high warmth and high structure and expectations. How can you make this parenting experience for your child high in both financial structure and relationship warmth? These questions can help guide your decision-making.

Why do you want to support your child? Why is it important to allow them to focus on their education, career, or passion project? Answering these questions will help determine why you create financial scaffolding in the first place. That’s where your “love and warmth” is located. That’s what is connected to making those boundaries.

• Are your expectations clear?
• Is the timeline realistic?
• Do you understand this journey may have detours?
• Can you allow the child to judge this relationship’s success?
• What happens if expectations aren’t met?

Money is inherently emotional, so understand that when entering a financial relationship with your child. An open conversation about a financial agreement should involve compassion and not make or break the relationship safety.