Home > Personal Finance > 3 Ways to Say ‘No’ When Your Adult Kid Asks for Money

Comments 0 Comments

You’ve heard it a thousand times: Take care of your retirement needs first, then consider whether you can afford to help an adult child financially. It’s like putting the oxygen mask on yourself before assisting your young child on a plane, they say, and then … the word “no” somehow gets stuck in your throat.

It’s hard to blame the adult children. After all, in many cases, they’ve seen parents deny themselves before — and they are living very different lives than the parents did, said Kathryn Hauer, a Certified Financial Planner based in Aiken, S.C. She said a lot of the parents probably lived in dorms or apartments with other people, starting at age 17 or 18 — and shared bathrooms. That’s not what dorm life is like now; many more students have private rooms, and lots of universities have state-of-the-art fitness centers. Living “like a college student” used to mean castoff furniture and roommates. Hauer said it may be easier to adjust to a life of near-poverty when you’re still in your teens than when you’ve finished college and are accustomed to what were once considered luxuries — international travel and comfortably appointed living quarters.

So you can’t blame young adults for asking. They’ve grown up with the idea that parents sacrifice and provide for them. To many, that’s the natural order of things. And some parents don’t change that — ever — putting themselves at great financial risk.

Sometimes, an adult, out of tradition or a sense of duty, says “yes” when the answer should be “no.”

“I had a parent call me to ask me if they should take out a loan, charge on their credit card or withdraw from their retirement the $10,000 needed to gift the adult child for the child’s wedding,” Patricia Grenier, a Certified Financial Planner in Springfield, Mass., said in an email. “This adult child already owned a home and was living with his fiancée. I advised against taking on debt or raiding the retirement account.”

Grenier related the story of another couple who helped an adult child with a down payment on a house when they really could not afford it. “This parent is ready to retire, has not saved enough,” she wrote. “The situation does not look promising for the spouse if the primary breadwinner should predecease her. The husband will need to work part-time in retirement, the wife will not be able to retire for a while. It was very hard to lay out the situation to them. There were lots of tears.”

Which brings us to what may be the easiest way to say no: “I asked our financial planner, and he/she said we can’t afford it.”

1. When You Can’t Afford It

Hauer said she could see three situations when a “no” is called for, and she offered some sample scripts parents can use, including even when they can afford to financially assist.

If giving money would jeopardize the parents’ retirement, “you could tell a child, ‘If we based our decision to give you money on how much we loved you, we’d give you every penny we had. However, we are getting older and we need the money we have to live, and we can’t give you the $5,000 you’re needing without putting our finances in jeopardy. So we have to say no,’” she said.

2. When That Money Is Already Being Used Elsewhere

The other scenarios are more difficult. What if you could afford to help if you forgo the trip you’ve dreamed of (and saved for) for years? In that case, here’s what Hauer suggests: “Say something like, ‘We love you so much, and we know you would like us to give you that $5,000. If we do, however, we can’t do our cruise this summer. We’re getting older, and we want to enjoy ourselves while we can, so we’re going to spend on ourselves instead of you.’”

Could this response result in hurt feelings? Tears? Accusations of parental selfishness? Absolutely, Hauer said. Still, parents can explain that they have put off some things they wanted to do for a very long time while raising children. Life is too short for the parents to go to the back of the line every time. It’s often hard for parents to do this because they feel guilty about not putting the children first, even when they are adults, Hauer said.

3. When the Purchase Is a Bad Idea

Finally, parents may get a request that they have the means to fulfill, but think is a bad idea. The young adult has had bailouts in the past and doesn’t seem to have learned, for example. Here’s how Hauer suggests phrasing the “no” then: “We can’t help you out with the $5,000 you are asking for. We’ve helped many times in the past, and we don’t think that help has made you stronger. It’s hard to learn how to make wise financial decisions, but a person has to learn sometime. We’re here to love you and support you emotionally, but you will need to solve your own money problem.”

In that case, support could include things like making sure the young adult knows how to check his or her credit and how to budget. (You can monitor your own credit scores for free every month on Credit.com.) Parents may also be able to help boost an adult child’s credit score by making them an authorized user on a credit card — without actually giving the young adult the card.

A Time to Say ‘Yes’?

That doesn’t mean parents should never say “yes.” If you have the means and you think it is in your child’s best interest, it’s fine, Hauer said. But in reality, most older adults do not have the means. Having the money in a savings account is not the same thing as being able to afford to give it away. However, if the young adult has a life-threatening emergency, the parent may choose to spend money earmarked for retirement, even if it means a scaled-down lifestyle later.

The saddest situation is when parents are afraid that saying “no” would result in their child cutting off love and attention. “The average child will be a little miffed,” Hauer said, “but it won’t last forever.”

More Money-Saving Reads:

Image: KatarzynaBialasiewicz

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team