When a child moves back home, see it as an opportunity to spend some quality time together, provide a little financial support, but also to offer some tough love.

Many of us continue to feel the effects of the recession, especially young adults, a lot of whom are still receiving financial support from, and even living with, Mom and Dad well after graduation day. 31 percent of Americans between the ages of 18 and 34 are living in their parents’ home, according to a recent Pew Research Center analysis of census data.*

If you find yourself supporting your kids longer than you’d anticipated, it is crucial that you resist the temptation to tap into your nest egg to cover those unplanned-for expenses: Making early withdrawals from your retirement account will cost you a mint in penalties and taxes as well as deplete the savings you’ll soon need. You may tell yourself that’s not such a big deal—you can always just work a couple years longer—but how can you predict with any certainty whether your health will allow for that plan, or whether your company will lay you off? Your children have decades to get their finances in order and save for retirement; you do not.

Here are a few ways you can help your children financially while encouraging them to get back on their feet:

  • Charge rent. That doesn’t mean splitting the bills in half. Charge enough to keep them independent and incentivized to move out; you may even decide to put some of their contributions aside to help with moving costs when they begin looking for their own place.
  • Put an expiration date on it. Plan together for a future move-out date, giving your kids a firm goal to aim towards. Recommend budgeting apps, or free financial counseling from the National Foundation for Credit Counseling to help them devise a saving plan.
  • Gift or loan? Framing any money you give your child as a gift can minimize the tension that may result from not being paid back. If you prefer to package it as a loan, have your child take the lead in drawing up a written contract, with realistic payments and due dates.
  • Be open, and set an example. Talk to your children about your retirement savings and the boundaries you have set so as not to negatively affect your cash flow. Teach by example; modeling healthy financial habits is the best way to ensure your kids will have the same approach.

As much as we’d like to cushion our loved ones from harsh realities, learning how to bounce back from failure and making do with what’s available are important skills for young adults to cultivate. Self-sufficiency is perhaps a more valuable gift than any financial contribution you make.


* “For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-Olds,” pewsocialtrends.org,” May 24, 2016