5 Expenses You Should Stop Covering and Transfer to Your Adult Children

As children grow into adulthood, it’s crucial for parents to encourage financial responsibility and independence. While it can be tempting to continue covering certain expenses, doing so may inadvertently hinder their ability to manage their finances effectively.

By gradually shifting financial responsibilities to their adult children, parents can help them develop essential life skills and prepare for future financial challenges. Here are 5 expenses that most parents cover for their children but should consider stopping as children grow into adults.

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#1. Cell Phone Bills

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Covering your adult child’s cell phone bill can prevent them from understanding the full cost of their personal expenses. When they don’t have to pay for their own phone, they might take for granted the associated costs, such as data overages, international calling, or frequent phone upgrades.

Paying for their own cell phone encourages them to budget effectively and prioritize their spending. They will learn to evaluate different phone plans, compare costs, and potentially limit their usage to stay within budget, which are all valuable financial skills.

#2. Car Payments and Insurance

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Managing transportation costs is a significant part of adult life. By taking on their own car payments and insurance, adult children learn the realities of owning a vehicle, including loan interest, insurance premiums, and the significance of keeping a spotless driving record.

This responsibility teaches them about the importance of keeping a good credit score, managing debt, and budgeting for regular expenses such as fuel and maintenance. It also helps them understand the financial commitment involved in owning and operating a vehicle, which is a substantial part of adult life.

#3. Health Insurance

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Once adult children are no longer eligible for coverage under their parents’ health insurance plans (typically at age 26 in the U.S.), they should transition to securing their own health insurance. This responsibility emphasizes the importance of healthcare planning and financial preparedness.

Taking on this responsibility ensures they prioritize their health needs and understand the implications of healthcare costs. They learn to navigate different insurance plans, understand premiums, deductibles, and co-pays, and appreciate the necessity of having adequate health coverage, promoting long-term financial and physical well-being.

#4. Rent and Utilities

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Living expenses such as rent and utilities are fundamental aspects of financial independence. By paying for their own housing and utility costs, adult children learn crucial budgeting skills and the importance of managing monthly bills. If adult children still live at home, it’s time that they pay their share of these costs at home as well.

This responsibility fosters a sense of accountability and independence, preparing them for future financial commitments such as homeownership or other significant investments. It also teaches them to live within their means and prioritize their spending to cover essential living expenses first.

#5. Subscription Services and Entertainment

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Covering costs for entertainment, streaming services, or other subscriptions can lead to a lack of appreciation for discretionary spending. Without the responsibility of paying for these services, adult children might not recognize the cumulative cost of multiple subscriptions and other non-essential expenses.

Encouraging adult children to pay for their own entertainment helps them distinguish between needs and wants. This practice promotes mindful spending and budgeting, helping them to make more informed decisions about their discretionary income and prioritize their financial goals effectively.

So, which one of these expenses are you still covering for your adult children?

Disclaimer – This list is solely the author’s opinion based on research and publicly available information. It is not intended to be professional advice. 

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