When we are young, our parents pay for most things for us. As we age, we slowly learn to pay for things ourselves, either by earning an allowance, saving up monetary gifts, or getting a job. Then, once we graduate high school and get a job (or graduate college and get a job), bills shift to us. Although this isn’t the progression in every family, most families follow a similar pattern. Once a child turns eighteen, or graduates college, they become responsible for their own finances. Although most of us try to manage our finances ourselves, sometimes there are circumstances where we need help. But just how do you know when it’s acceptable to take money from your parents, and when you need to find a different solution to a financial problem? Here are some questions to answer to determine if it’s okay to ask for or accept money from your parents.
1. Is it fair of you to accept money from your parents?
As mentioned previously, when we are young, our parents usually pay for most things for us. However, once we become adults, it is usually our responsibility to pay for our own bills. According to Gallup, 29 percent of U.S. adults under age thirty-five are currently living at home. It’s impossible to know if all of these adult children need to be living at home.
There is no specific age that you can’t accept money from your parents; once you become an adult, your decision should really be made based on the situation itself. So, first you should ask yourself if your situation really requires assistance. If you want to go on a vacation, but you don’t have the free cash, that really isn’t a good reason to ask your parents for money. Even if you have an emergency, and you have the money in your emergency fund but you don’t want to use it, you really shouldn’t ask your parents. You should save asking and accepting financial help from your parents for real emergencies (like hospital bills, loss of an income, etc.)
2. Are you asking for the money, or is it being offered?
Sometimes parents like treating their adult kids to financial assistance or gifts. Depending on the circumstance, sometimes it is reasonable to accept financial help if your parents are truly offering it to you because they want to. If they feel pressured by you, or you are asking for the money (and it isn’t an emergency), then you really shouldn’t accept the money.
Another thing to consider is that many adult children don’t feel comfortable accepting financial gifts from their parents because they are trying to do life themselves without help. So you have to figure out if you are truly comfortable with what your parents are trying to give you. Sometimes, parents really enjoy spoiling grandchildren, for example, but if you aren’t comfortable with that, then you need to say so.
3. What are the strings attached?
Regardless of whether or not your parents offered you a loan or gift, or you asked for one, you need to be sure that you agree to the terms before you accept it. If you have a financial emergency and your parents are willing to give you an interest-free loan (or just give you the money), that is great, but even if they want to charge you interest, it still might be a better deal than looking for a loan elsewhere. Sometimes financial gifts or loans come with unspoken strings (for example, if you don’t have a very good relationship with your parents, and they say something like, “Now that we are giving you this money, we should be able to see you more often,” be sure to read the lines.) You need to be comfortable with the terms if you are going to accept the help.
4. Can you pay them back?
A 2011 online poll by ForbesWoman and the National Endowment for Financial Education found that fifty-nine percent of parents gave financial support to their adult children (who were no longer in school.) With so many parents supporting adult kids, there are bound to be strings attached in some cases. Going along with the spoken and unspoken strings of accepting money is the question of whether or not you can pay your parents back. If they offer you a loan, you will have to pay them back, and you should do it in the time period that they require.
However, loans without specific expectations (your parents say you can pay them back whenever you can) can easily get pushed to the bottom of your financial commitment pile. In order to maintain a good relationship with your parents, and to truly act like an adult, you should prioritize paying them back in a timely manner. Even if they don’t ask you to, this is the respectful thing to do. If you know that you can’t pay them back in the time frame that they request, or at all, you may not want to borrow the money from them. Lastly, even if no strings are attached, just the fact that you will owe your parents might end up affecting you.
5. How will accepting the money affect the rest of your daily life?
You are bound to feel some shame accepting money from your parents. That doesn’t mean that you shouldn’t do it, nor does it mean that taking help when you really need it is shameful. However, most of us want to prove that we can be adults, and that requires learning to pay for things ourselves. You need to figure out if you will feel guilty or shameful for taking the money.
You should also consider whether or not your kids will learn from your example. If they frequently see you, a grownup, accepting money from their parents, they might expect the same to be true when they come to you for money down the road. There are many more issues to consider past whether or not you need the money. Although there are times when accepting money from your parents will be ideal, it won’t always be the case.