Financial assistance isn't helping your children
FINDER.COM.AU money expert Michelle Hutchinson is worried that adult children who receive financial aid from their parents will struggle to learn the value of money.
A new study has revealed that young adults are likely to accept financial help from their parents.
More than 1700 Australians participated in the study and finder.com.au found 86 per cent of parents provided assistance to their adult children.
Lending money, paying bills, free rent and significant purchases like holidays were the popular ways they contributed financially.
Ms Hutchinson said that although parents wanted to help their children get ahead in life, it could be detrimental to their child's financial well-being.
"It's expensive to live in Australia, but we need to teach our kids the value of living within their means otherwise they won't have a sustainable future," Ms Hutchinson said.
"Here is where the problem lies. When quizzed on why their parents help them out, more than half said their parents offer.
"Around 15 per cent admit it's because they struggle to manage their money while nine per cent admit it's because they're in debt.
"It's important for parents to stop feeling depended on. They need to focus on their futures too.
"Parents should ask themselves if the financial assistance will empower their child or enable them," she said.
Ms Hutchinson suggests that parents outline the limits of their support to make sure their children are working hard to be self-sufficient.
She also suggests giving out loans instead of cash as a gift.
"Giving adult children wads of cash, paying their bills or letting them live rent-free is creating a 'sponge society' where people may not learn how to live within their means, understand the value of money, budgeting and saving," she said.