Is it Time to Cut the Money Cord?


Now that my husband and I have entered the ‘empty nest’ population we are taking a good look at our finances and realize it may be time to start cutting the “money cord” with our adult children. We have successfully raised our boys…. which you all know is NOT cheap…we’ve bought them cars, put them through college….now we feel it’s our turn. Here is what I have learned (and am still learning)….

Start early…..children can earn money by contributing to household chores and taking on extra tasks. Make sure they understand their responsibilities and that their pay can increase as they get older and as those responsibilities change. Help them understand they can earn money through part-time jobs if they wish to save up for something. This will help them appreciate the cost and learn the value of money.

There’s no right or wrong age to stop financially supporting your kids, but consensus agrees that the financial wire should be eliminated by the time your child is in their mid-20s. To make the process smoother and effective for them, you need to ensure that they start earning for themselves at an early age. It’s true that financial help might make your child’s transition to adult life easier in the short run. But this is a critical time to build confidence in many areas of life, including how to manage money.

If your child has been financially dependent on you for too long, you might need to have a conversation before cutting them off. You need to let them know that it is natural and important for kids to move out and that it is good for everyone. Be kind and loving. At the same time, be firm on your stance and give them a time-frame in which they should move out. Now, this can be difficult. Your child may come off as unappreciative, and there may be arguments. You may need to give them a grace period- say two to three months to find a job, go to college or get an apartment.

As parents, we love our children unconditionally…we never stop being their parents, no matter how old they are. However, we need to understand that our children should be independent, financially stable and living to their fullest potential.

Now… just because you can’t support them financially doesn’t mean you shouldn’t be helpful. You can help them find a job or support them as they are looking for an apartment. If your child is financially independent, has some savings but doesn’t have enough to buy a house or make a down-payment on the property, support them financially as well (if possible), but make sure that the help is limited and doesn’t affect their independence….or yours.

Remember, having an adult child relying on you financially for too long will impact your life as well. In fact, some parents are now taking on debt or even delaying their own retirement because their child cannot support themselves.

It’s about tough love….which is not easy…however as you start to talk about your own retirement and focus on your dreams – you will come to the realization that it is time to have the conversation and to consider closing the doors to “The Bank of Dad and Mom”.



Michele Bjorkgren, Financial Advisor
Compass Financial
p. 515.327.1020 x13
Securities Offered through LPL Financial


A little more about us:
Compass Financial is an independent, fee-based financial advisory firm in West Des Moines, Iowa. The Compass Team helps individuals and families develop an inspiring vision of their financial future and a realistic strategy.

By listening closely to our clients’ true needs, wants, hopes, desires and dreams we are able to combine Wealth Management and broad Financial Planning customized to each individual situation. It’s our goal to assist you in developing a personalized financial road map. The results from the process should include confidence that comes from planning. As we all know, life happens, sometimes ambushing the best laid plans. Accepting a new reality and adapting the financial plan is work we have done many times for our clients.

We also offer Financial Check Up or Second Opinion Services to those who want to enhance the service they are already receiving. This should lead to a better understanding of your current plans and give added confidence to your existing advisor relationship.

Sometimes life’s biggest challenges come in the form of transitions, retirement, marriage, health issues, divorce, unexpected loss, or even college savings. Our team at Compass has experienced many of these life transitions, it’s our hope to come alongside you and your family. These defining moments of life provide opportunities to implement financial strategies that can have long lasting impact. The first step is always the most difficult, but can also be the most rewarding. Please Contact Us today to receive your free, no obligation, one hour initial consultation!

Leave a Reply

Your email address will not be published. Required fields are marked *