Cutting the Financial Cord

In a 2023 Credit Karma survey, nearly a third of parents with children over 18 reported currently providing them with financial support. 64% of those parents said they provide support by allowing their kids to live at home, and another 49% pay monthly bills for them.* Both sides have good reasons. Most adult children are trying to save money and get student loans under control. The adjacent graph lists parents’ various reasons for continuing support.


While there are times when help is necessary, parents need to think of their financial health and overall well-being first. If you have an adult child who is still under your financial wing, you need to establish boundaries for your assistance.


The best plan is to establish financial goals for when the child will become financially self sufficient up front. Or, if you’re already helping, the time is now.

Assistance might be provided until they save enough for housing, they can afford their student loan or car payments, their divorce settlement is worked out, or a similar financial milestone.

For a child with a health issue or addiction, consider talking with your legal advisor about a special needs trust, with funds going directly to the child’s treatment and recovery. And there’s nothing wrong with asking kids to contribute an affordable amount for their stay.

*Survey by Qualtrics for Credit Karma, November 2023

Raising Financially Savvy Kids

Whether your kids are toddlers or teenagers, it is critical that you teach them how to become financially independent.


If you have adult children living at home with you, work with them to set a date to move out. Having a solid end date in mind can help keep them moving forward and on track.


Use your experience to help your child create a realistic budget to help ensure spending doesn’t exceed income after taxes and savings. The budget should list after-tax salary, living expenses, debt payments, retirement contributions, savings goals and spending money.

Savings goals should include building an emergency fund of three to six months of living expenses in case they lose their job or need to pay an unexpected bill.


Educate your child on the benefits of the time value of money, paying off debt, and how to build good credit. This can help keep them from running aground financially in the future.