When Financial Help For Adult Children Harms Both Generations

A common issue I see with financial planning clients is whether and how to provide financial help to adult children. Should they pay for college? Cover the down payment on a home? Help out with expenses for the grandkids? Take care of debt or bail out financial mistakes?

According to a 2025 survey done by Ipsos for the Alliance for Lifetime Income, 17% of parents with at least $150,000 in investable assets are providing financial support to adult children age 26 or older. What I find concerning is that about half of those parents say the help is negatively affecting their own financial security.

Decisions about giving money to kids are made from a complicated mix of love, fear, guilt, hope, and sometimes unresolved history. As parents, we want to support our kids and help them succeed. We may want them to have things easier than we did.

Every generation faces financial challenges. For today’s young adults, that included experiencing the Great Recession early in life, followed by the global pandemic just as many were launching careers. Now they are navigating a chaotic time of rising costs, political division, and rapid technology changes that threaten jobs. No wonder many parents want to help financially.

What may be different today is parents’ capacity and willingness to help. Many Boomers, after surviving their own challenges, accumulated wealth during strong market decades. They also tend to be highly involved in their children’s lives and, in many cases, anxious about their outcomes. A part of them may feel responsible not just for raising their children, but for ensuring they succeed.

The help I see ranges from one-time assistance to ongoing subsidies. One-time support might include paying down student loans, contributing to a home down payment, or bridging a period of unemployment or illness. Ongoing help often looks like covering insurance, subsidizing rent, or making regular transfers that gradually become part of the family’s normal cash flow. I’ve seen such support continue into adult children’s thirties and forties.

How, then, do parents decide what kind of financial help makes sense?

I suggest looking both inward and outward to answer two central questions: “Can we afford to help without harming our own financial future?” and “Will this increase or decrease the child’s movement toward financial independence?”

Helping a child weather a layoff or invest in a career can be stabilizing and wise. Subsidizing a lifestyle beyond what their income supports or repeatedly bailing them out of financial missteps most often is neither.

Often there’s a part of a parent that feels deep discomfort watching a child struggle. That part may carry memories of their own early hardship and vow, “My kids will never feel that.” Another part may fear being seen as ungenerous. Yet another may derive identity from being needed.

An adult child may have a part that feels entitled and another that feels ashamed to ask for help. Still another may avoid stepping fully into responsibility because parental support is readily available.

These parts aren’t bad or wrong. They’re protective. They’re trying to reduce pain, avoid shame, or preserve connection. But emotional financial decisions driven by these parts can damage family relationships and undermine the financial wellbeing of both generations.

Genuine financial independence involves more than having enough money. It’s about confidence, competence, and the lived experience of managing one’s own resources. Shielding adult children from every financial strain can unintentionally stunt those capacities. Thoughtful generosity can intentionally build and strengthen them.

The most effective giving includes conversations that clearly establish and communicate limits and expectations. The goal is to help in ways that support long-term well-being for everyone involved.

Rick Kahler, CFP, is a fee-only financial planner and financial therapist with a nationwide practice, Kahler Financial Group, based in Rapid City. His co-authored books include “Coupleship Inc.” and “The Financial Wisdom of Ebenezer Scrooge.”

Photo: public domain, wikimedia commons

The information provided is for educational purposes only and should not be construed as investment advice. The views expressed are subject to change based on market or economic conditions. Past performance is not indicative of future results. Any reference to potential benefits is illustrative and may not apply to your individual circumstances. You should consult with your financial adviser before making any investment decisions. KFG, LLC is an SEC-registered Investment Adviser. 

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