When Adult Children Need Money

If we’re going to give, here’s how to do it wisely.

Published April 07, 2023

While doing research for an article, I saw a 2022 Savings.com survey that found that half of parents with adult children give them some financial support. I wasn’t surprised. While I don’t have children of my own, it’s not unusual for me to see one of my sister friends slide a daughter a check to help with day care or Cash App a few hundred dollars to tide Junior over.

For Black folks, helping family members financially is in our DNA. Not only does research show that we are more likely to give family members financial assistance than whites are, but there is even a name for it. The “Black tax” is a phrase coined to describe how we sometimes feel obligated to aid struggling family members financially.

I don’t know a single Black parent who doesn’t want their child to do better than they did in life, and it’s natural for parents to want to help their children succeed. But while our hearts are often in the right place, it’s sometimes not in our best interests to give, or we may not know how to create an arrangement that honors our loved one’s needs — and our own.

Helping someone out financially “has to be based on an honest and trusting understanding,” says Laurence Steinberg, author of AARP’s You and Your Adult Child: How to Grow Together in Challenging Times. In his book, Steinberg touches on how helping an adult child financially can be gratifying to all parties concerned — as long as you follow a few wise words of advice.

Make sure you can afford it. I once lent a family member money by charging something they needed on my credit card. I was left not only with the bill, but with a ton of regret. Black women, on average, make just 64 cents for every dollar earned by a white man, so we’re already behind. Not only should we be socking money away for a rainy day, but we need a plan to support ourselves once we retire. If you sacrifice saving for retirement to help your kids financially, you might end up needing them to support you financially later in life. Financial services company MassMutual recommends that we lend no more than we can afford to never get back.

Be clear about the terms. I’ve heard many a story about a friend or relative sacrificing in some way to lend a “struggling” adult child money only to learn that their child was taking off for a weekend in Jamaica or indulging in some other type of lavish spending. The parents in those cases typically felt taken advantage of, and in one case, the relationship between mother and son has yet to fully recover. To avoid that, “you need to be explicit and say, ‘I’m trusting that you’re going to put the money toward what you said you needed it for,’” Steinberg says. But then go a step further, Steinberg adds. Ask your child to let you know if their circumstances change and they don’t need the financial help — or as much of it — anymore.

Also, come up with a plan in the beginning for how long the financial support will last. If you need to adjust the time frame, you can always extend it.

Understand that different adult children have different needs. Some moms with multiple children might feel guilty about helping one child more than another. If you fall into that category, stop, Steinberg says. One child may need money more than another not just because of salary differences but also because of circumstances. For example, one might live in a state with a high cost of living or be dealing with an ongoing expense such as a child with a chronic illness. In these cases, “fairness means taking the different children’s situations into account and making a decision that is based on that,” he says.

Make sure all parties are on the same page. Before agreeing to lend money to an adult child, Steinberg recommends talking to your partner, if you have one, whether that person is the child’s parent or not. Once everyone is in agreement, go over the terms and make sure it’s clear how much support you’ll be providing and whether or when you expect to be paid back. If at any time during the arrangement you feel that it’s hurting your relationship or your finances, don’t be afraid to say so, and to pull back and stop.

“You don’t want to feel bitter about it, you don’t want to feel resentful about it, and you don’t want to feel like you are depriving yourself of something important,” Steinberg says.

Find You and Your Adult Child: How to Grow Together in Challenging Times wherever books are sold.

Tamara E. Holmes is a Washington, DC-based writer whose work centers on the intersection between health, wealth and happiness.