Financial advisor Suze Orman is back in the news this week and she’s been doling out some tough love for parents whose finances are being drained by their offspring. Let’s take a look at what she said.
Suze Orman Sounds Off on Adult Children Living at Home
Following a January report by the Pew Research Center that explored how 18% of parents are struggling due to their young adults still living at home, Suze Orman has hit out.
Parents, Take Note
“I sure hope you won’t let your adult kid freeload. That’s not generous to you or to them,” Suze stated in a blog post.
The Rising Trend of Adult Children Living at Home
According to the study, one out of every three 18-34-year-olds is still living at home.
Suze Orman’s Take
As Orman says, “There are more adult children living at a parent’s home today than thirty or forty years ago,” an issue that is partly due to the current cost-of-living crisis and young adults struggling with student debt.
Suze’s Advice for Parents
If you’re feeling the pinch due to having an extra dependant, Orman suggests that they “start paying some of their way” as “adults don’t freeload.”
Setting Expectations
Orman has been pushing for parents to ask for money from their kids for years, and her words are more relevant than ever today.
Take Action Against Freeloading Kids
She suggests that parents either ask their adult kids for money to contribute to the family cell plans or cover their share of the family insurance plan.
Orman also thinks that charging rent should be a priority. It “doesn’t have to be a lot,” but something is better than nothing.
A Lack of Independence
The Pew study reveals that less than half of adults aged 18-34 are financially independent from their parents, an issue Orman is acutely aware of.
Encouraging Financial Independence
Most respondents are confident that they will eventually be financially independent, and living at home is a good way for them to get on the ladder.
However, that doesn’t mean they shouldn’t contribute—it’s better for everyone if they do.
Teaching Financial Responsibility
Orman is trying to help parents give their adult kids some financial lessons, which many parents might find uncomfortable.
The Tough Love Approach
Teaching them invaluable financial skills while they’re still living at home will work wonders for them when they finally leave the nest.
Facing Reality
She recommends that parents collect their rent and bills on the same day every month to prepare their kids for the real world.
Advice for All Parents
She recommends these tactics for anyone regardless of their financial status, as when the time is right, you can “return it to your kid to be used for the security deposit on a rental, or to help boost their growing emergency fund.”
Breaking the Cycle
For those nervous parents who are struggling to bring the issue of payment up to the adult kids, Orman suggests this line, “I am no longer your bank account! I’m getting to the point where I need my money to be able to support myself. You are old enough now to go out and figure it out.”
Financial Empowerment
This tough love measure will help your kids learn how to budget and force them to be more careful about their spending.
Blueprint for Success
It’ll give them a leg up when they eventually move out and have to manage their own household finances, and will hopefully prevent any phone calls asking for emergency parent bail-outs.
Adult Children Paying Their Way
Plenty of parents ask their kids to pay their way, as proven by the Pew study, which noted that 72% of young adults contribute to bills, rent, or the mortgage or simple essentials like groceries or fuel costs.
Empowering Parents and Adult Children Alike
“Your kid will always be your kid,” Orman states, “But they are also now an adult.” If you’re struggling, it’s unreasonable for your adult child to carry on relying on you if they’re capable and willing to work and pay their rent.
It’s a lesson many parents need to come around to, one that has a net positive for parents and children.
Equipping Families for Success
As Orman says, “You can teach your adult kid the lessons right now that will help them avoid financial trouble when they launch into their own households.”
The post Suze Orman Urges Parents: Don’t Let Adult Kids Freeload first appeared on Wealthy Living.
Featured Image Credit: Shutterstock / Al Teich.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
