Financial Independence Week: When And How To Cut Direct Financial Ties

For some, deciding when to cut financial ties is easy. In my situation, it was the day I left for college: other than birthday and Christmas gifts, I was basically on my own after that (though my mother would irregularly send me small amounts of cash with the purpose of “going out and having fun” during my first year of college).

For many others, though, finding the right time to sever financial ties can be difficult. Should it end when they go to college, or should you support them throughout their studies? Should you continue to give them money while you can “afford” it? For many families, these are questions without clear answers, and by avoiding them, you’re merely postponing the inevitable.

So when is the right time to cut ties?

When your heart even begins to hint that it’s time, it’s almost always time. Many parents tend to wait longer than necessary to cut financial ties to their children out of a sense of obligation. The truth is that by paying allegiance to this imagined obligation, you’re actually damaging their personal growth by supplying them with financial support.

When your parents cut ties with you. Think back to that period and ask yourself whether that was the right time – and whether you learned important things from that separation. This is the best example you have in your life of how to cut the ties, so use it as a frame of reference to decide what is right for you.

When your children are using the money to buy many frivolous things. If you see that your children are buying brand new automobiles and other items that are clearly beyond their means without your support, it’s time to consider cutting the support because they’re beginning to use your support as part of their expected salaries.

When they begin to expect and demand what you give them. When support of an adult begins to transform from assistance to entitlement, it’s time to stop giving and let them start living.

Here are some tips for when the time comes to cut financial ties.

Make it clear why you’re doing it. Don’t just call them up and say, “In six months, you’re done,” because that will just cause resentment. Instead, call them up and reinforce the fact that you feel they are ready to be on their own. Don’t let it be about money, let it be about independence and respect for a maturing individual.

Give plenty of forewarning. Do not just cut ties without warning, because they may have made financial commitments relying on your support. Instead, give them a cutoff date that’s very clear (a calendar date, not “in about a year”). You might also want to start slowly reducing the support.

Offer advice and nonfinancial support. Offer as much advice as they want, but don’t thrust it upon them. While doing this, be very careful to follow some basic advice for talking about money to adult children. Don’t be pushy about it, but make it possible for them to come to you.

In short, you should frame the conversation about independence and respect, not around dollars and cents.