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empty nesters trying to navigate what to do when gifting money to adult children

Gifting Money to Adult Children—What Do We Do?

August 9, 2023

What To Do if Our Child Needs Financial Assistance

Here’s a tough question—how should you respond when your adult child asks for money? It may not have happened to you yet, but the odds are it will. A 2023 survey of 2,000+ U.S. adults by found that “68% of parents of adult children have made or are currently making a financial sacrifice to help their kids financially.” Who can blame them? 

Adulting can be hard. Relationships end. Bad choices are made. Emergencies happen. As a loving parent, you want your kid to know they can still rely on you. But in your new role as friend and wise counsel, having a strategic plan and honest conversations will give you and your spouse as well as your adult child the clarity and confidence needed to make thoughtful, well-informed choices. 

Let’s look at some questions to consider before hitting send on a Venmo request. 

1. Can you afford this? 

This can be an uncomfortable question to ask yourself, and it will likely lead to an uncomfortable conversation with your child. However, just as you need transparency from them to decide if their financial problem is a situation you should jump into, your young adult should know how their request will affect you. It’s time to be honest. 

Your child may not know it’s common for parents to count on the empty nest years to bank more of their income for anticipated travel, neglected home repairs, additional retirement fund investment, or the financial responsibility of caring for their own elderly parents. Now that your child is an adult, it’s important to give them a clearer understanding of your financial ability and responsibilities. This gift of transparency can provide a perspective of the bigger picture and help them as they learn to make their own financial decisions.  

2. Why is your child asking for money? 

This is another place where an honest, loving conversation is vital. Be sure to ask questions that clarify the request and address your concerns. This activity will also help your young adult grasp that asking for money comes with obligations and accountability, even when asking their parents. 

Here are a few ideas to get you and your spouse started. 

  • Why do you need the money?  
  • Is this an unexpected, one-time problem? Tell me more about that. 
  • Is this going to be an ongoing expense?  
  • Should we brainstorm a long-term solution?  
  • Tell me about the big picture! What are you hoping to achieve? 

Talking through these questions over a casual dinner or cup of coffee should help the conversation feel less like a confrontation and more like an effort to understand their problem or needs. Encourage your child to explain the circumstances or expand on their ideas, so everyone can get a sense of the best next steps.  

3. Will giving the money help or hinder them? 

As parents, it’s sometimes challenging to see the fine line between providing a helping hand or enabling. You love your kid and don’t want them to be in an uncomfortable position or even unsafe. On the other hand, as an older, wiser adult you also know difficulties often provide the best learning opportunities and personal growth.  

Think back to your own early years. It’s likely one of your steps into adulthood included living through some financially difficult situations. You may have lived in a small apartment or driven an older car. It’s possible there was a lot more ramen and mac and cheese than chicken and vegetables in your diet. These situations helped you learn to budget, be creative, and appreciate the gifts that came farther down the road. They also gave you the confidence to know you were capable of handling problems life tossed your way. 

None of this means you shouldn’t help your child. It’s a gentle reminder that you spent 20-30 years building the level of comfort your family has enjoyed. Now it might be your kid’s turn.  

Now what? Once you’ve decided whether you’re going to let your child borrow money or give them money, review these best next steps to help your family and your finances stay in a healthy place. 

If the answer is no:

  • Say no. Saying no doesn’t mean you don’t love your kid. It means you have gathered the appropriate information, and it’s not the right decision at this time.  
  • If you can’t provide financial assistance, are there nonmoney solutions you can offer? Consider helping them plan a budget, brainstorming a side gig so they can acquire additional funds, or assisting them in finding resources like books, videos, or classes to help them build their own money muscle. 

If the answer is yes:

  • Be clear in communicating your expectations. 
  • Will the money be a gift or a loan?  
  • If it is a gift, are you willing to provide the money with no strings attached? 
  • If it is a loan, what is the repayment schedule?  
  • If this same problem arises again, how can you work together to find a better, more effective, long-term solution? 

Moving forward with clear boundaries and expectations shows your child you trust them, you respect them, and you’re proud of the adult they are becoming, all while modeling wise financial decisions that will protect your family in the future. 

Lastly, if your child is in a serious dating relationship with the potential for a future engagement or they’re currently engaged and they come to you for advice regarding starting out on a healthy financial foundation, point them to our list of 40 financial conversation starters to use before marriage as well as our blog, “How To Manage Finances in a Marriage.” 

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