How Not to Move Back in With Your Parents

Finances After Graduation Podcast Episodes

Episode 50: Cutting Yourself Off from Your Parents
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Morgan McMillan joins Pete and Alex to discuss the uncomfortable topic of financially cutting yourself off from your parents.


Read the Show Notes

Our goal is to provide you with tips and resources that will put you in the position where you won’t be surprised by your finances. Surprises tend to mean that either you weren’t prepared for what was to come or that you had never experienced it before and may just be unsure of what to do. For many college students who rely on assistance from their families while they’re in school, it can be a bit of a shock to start receiving bills all of a sudden without having ever been exposed to it in the past. So, while you might be sharing rent with roommates or have just had your first go-round paying bills this school year, expect that things will be different from year to year, particularly once you graduate. Your student loan payments will start in about 6 months after you graduate; and if you’re renting for the first time or trying to work out paying bills while living at home with your parents, this might be a new responsibility for you.

Your parents love you...we are 97% sure. They have enjoyed the past 20 years – give or a take a few – watching you grow, helping you when you need help, and providing the environment you need in order to thrive. Maybe they’ve been the ones staying up late to talk to you about some problems you’re having, shuttling you far away so you can get to practice and games, or giving you money when you’re strapped for cash and need it to go see your favorite band.  The bottom line is that your parents have tried their best to be there for you.  And now it’s time for you to give back…

...by telling them no.

One of the most difficult things for either a parent or a child is to figure out when to change the relationship.  Part of the change will be a shift in the financial relationship, meaning the child – if he/she has in the past – should no longer be accepting parents’ offerings to pay for things. Not only could it have a detriment to the parents’ ability to save money toward retirement, but it will prevent the child from becoming a full-fledged adult because they are to some extent still relying financially on a parent. As Pete says in this week’s podcast, this notion is crazy.

Your financial future will be that much stronger the sooner you let go of your parents’ financial teat (yeah, we said it). The sooner you are able to control your finances and not rely on others, the sooner you will be able to put yourself a position to succeed. If you continue to rely on others to provide you with financial help, you will continue to have some some strings attached to you that might prevent you from doing the things you want to do. We’ve experienced it in our own lives, and we’ve seen it in others: family members throwing guilt toward children when they refuse to do something and using the money that they’ve given them as the source of guilt. The amount of tension and problems that it can cause can be extreme, and it’s important that you do what you can to avoid such a situation.

We’ve also heard of instances in which parents provide large financial contributions as gifts for their children to then use it against them later. While the idea of having somebody pay a major expense for you sounds great, in the long run it could cause more headaches than it’s worth.

So, we’ve talked about the dangers of not becoming financially independent, but how do you go about doing that? The best way that we have found is for you to develop a post-graduation schedule that outlines when you will become financially independent. It’s possible it could take several months to get to this stage, but what’s important is that you detail when you’ll start taking over your expenses so every party involved understands your plans for being on your own. If you are living at home after graduation to save money and/or holding yourself steady while you try and find a job, express a desire to take care of some of the household bills or volunteer to pay some of the household expenses. Even in a state where you’re having to live off somebody else, do your best to simulate being financially independent. Your parents will appreciate it and, down the road, you will too.  

If you’re nervous about becoming financially independent, that’s what IU MoneySmarts is here for: to help you build the tools you need to become a financial master and navigate the financial world on your own. We’ve spent the past 50 lessons educating you on the big and the small in the financial world. The scary thing is that there are so many more things to talk about. So, expect us to keep cranking out more and more topics in the financial world.  We’re not going to promise you’re going to learn everything there is to know about finances by tuning in to us, but we will promise you that you’ll have a much better head start once you graduate. Of course, feel free to e-mail us at mnysmrt@iu.edu to submit any topics you’d like us to cover.  Or for some personalized attention, schedule an appointment with a member of the IU MoneySmarts Team. Here’s to the next 50!

Best of luck ending this school year and congratulations to the Class of 2015!

Season 4: 04/20/2015