When I meet with potential clients, I get a sense of what’s on Millennials’ minds when it comes to their money. Many of you have the same concerns — things like saving, paying off debt or saving for retirement.
But I’ve noticed a trend that I didn’t anticipate: potential clients who want to get permission from their parents before working with a financial planner.
Not advice. Permission.
This is especially true of women who tell me they need to talk to their dad first before deciding to hire me.
Please note: I’ve never had a man tell me he needed to ask his mom if she thought it was a good idea to hire a financial planner. Ladies: stop it! You’re a grown ass woman and can make your own decisions about your finances.
In some cases, these are people who have been financially independent from their parents for a while — some are even married! Millennials are a generation that has had a rough go of the whole adulting thing, and so they welcome their parents’ insights when it comes to making major life choices.
There’s absolutely nothing wrong with your parents being part of your inner circle of trusted life advisors, or even with them helping you financially if you need it and they can afford it. I myself just moved out after living with my parents for a time. These arrangements can work!
But the goal in seeking your parents’ help and guidance should be to eventually strike out on your own (and if you have a spouse or live-in significant other, make them your partner in making financial choices).
Even if you still receive monetary support from your parents, there are ways to gain autonomy so you can ultimately feel like you don’t need their permission to make decisions.
Ask Tough Questions Before You Take A Loan From The Bank of Mom And Dad
You’re struggling and your parents generously offer to help. Before they cut you a monthly check, discuss the terms.
- Is this money a gift or a loan?
- What, if any, strings are attached?
- Do they expect a say in how that money is spent?
- How long can they afford to help you before they need to stop sending you money?
If you’re both happy with the terms of your parents’ help, great! Just remember to have periodic check-ins with them.
Be honest with your parents if your financial situation changes, and ask them to be honest with you if sending you money is putting them in a bind after a while.
In some families, money comes with conditions.
Your parents might insist on being involved in where their money goes, and they might even refuse to help fund a lifestyle they don’t approve of — whether that’s the field you work in, the city you live in, or the people you live with.
Consider carefully if you can live with these stipulations.
How To Keep Cash From Wrecking Your Relationship
If you’re accepting money from your parents, it’s important to establish some healthy boundaries on both sides.
You might not appreciate your parents combing through your credit card statements, but they might not appreciate you racking up $75 bar tabs on their dime.
What might help is for you and your parents to agree on exactly what their money pays for.
For example, they might send you money that’s earmarked toward rent. You parents can rest easy knowing you have a roof over your head, and you can budget your own money for the rest of your expenses without their input.
At any time, if this arrangement isn’t working, both you and your parents can renegotiate.
Maybe your parents can only afford to help you for a limited time. They might have veto power over your choice of apartment, for example, because the rent is beyond what they can comfortably send you.
You can also back out of the deal if you’re better able to support yourself or you’re uncomfortable with your parents’ involvement.
The important thing is to be honest with each other so money doesn’t wreck your relationship.
Your parents don’t want to feel taken advantage of, and you don’t want to be treated like a child.
Great communication upfront on how (and where) you’ll spend the money can keep it from wrecking your relationship!
Enjoy Your Training Wheels While You Can
If your parents are helping you out financially, consider this time to be adulthood-in-training.
Rather than hand over control of your money to them, this is the perfect opportunity to get a hang of paying bills on time, budgeting, paying off debt, and using a credit card responsibly — all with a safety net.
As you gain confidence in your ability to manage your finances, you can work toward being financially independent.
Your parents can be there for you as a source of wisdom, but not as decision-makers in your life.
As you hit the milestones of finishing your education, starting your first job, and moving out on your own, add taking control of your financial decisions to that milestone list.
As you get older, it only gets more important that you understand your finances so you can make the right choices for you based on your life stage.