We have an adult daughter, 29 years old. We also have a 30 years old daughter; she does not live at home and does very well on her own. The 29-year-old does live at home and we are ready for her to move out. The problem is she cannot move out due to financial constraints.
She got into credit card trouble and is now working with a consolidation loan to pay them off. She also has a car payment and a horse that she pays [veterinary] bills, etc for; however, we pay the board for the horse monthly at considerable rates. She also wastes her money on frivolous things such as Amazon shopping, dining out, etc…
We have tried helping her with a budget, tracking expenses, etc. But nothing seems to work for long. She has about another 2 years until her car and consolidation loan are paid off. She needs to get out so she can see how the real world works and get her own sense of being sooner than later! What should we do?
Dave & Erika, Minnesota
You Are Enabling Her Dysfunctional Spending
Dr. Chloe Carmichael, Ph.D. is a clinical psychologist and the author of Nervous Energy: Harness the Power of Your Anxiety as well as Dr. Chloe’s 10 Commandments of Dating. Her approach is goal-oriented and emphasizes reaching our fullest potential through a strengths-based approach.
Dear Dave and Erika,
You are clearly loving parents who are trying to do what’s best. You also seem to realize that what you’re doing now isn’t working for yourselves, or for your goal of teaching your nearly 30-year-old daughter about basic financial responsibility.
Your daughter’s past financial irresponsibility (ie credit card problems) is not being helped by you enabling her via free room/board for herself and her horse.
In this case, you’re not only enabling her dysfunctional spending, you may also be inadvertently sending unhealthy messages that: A) loving relationships hinge on the other person’s willingness to tolerate her self-centered behavior, and/or B) that she is actually unable to run her life any better than she is now (why else would mom and dad need to tolerate all this, from her perspective?).
It won’t feel pleasant to have a hard conversation about necessary changes but remember that your current situation is both unpleasant and unhealthy. To make a change, consider telling her that you’ve come to realize that enabling her isn’t good for her; and so you will no longer be offering any sort of free room/board to her (or her horse!).
Depending on local rental laws and your personal sense of how to handle this, you could tell her she has 30 days to find somewhere else to live; or you could start charging normal rates for room and board; or you could immediately start charging a very reduced room/board fee with a graduated plan of how the fee will increase over the next few months along with an ultimate deadline of when she will be expected to move out.
Whatever you charge, it should account for utilities, food, and any other appropriate items. You would also want to let her know that she is now responsible for her horse’s room and board too.
Suggest to her that if she has any difficulty with this then she should discuss it with the horse facility to see if she can make arrangements, but also let her know that people without the ability to pay for their room and board are not typically owners of horses and so she may want to reconsider whether it makes sense for her to own a horse at this point in her life. Similarly, offer to accompany her to a car dealership if she would like to downgrade her choice of vehicle and/or learn to take public transportation and/or explore rideshare options.
You may also want to learn about eviction procedures in advance of the conversation so that all of the boundaries of the situation are well-known and understood when you explain the need for her to pay room/board and/or for her to make plans for her own adult residence. Your daughter likely will push this as far as you enable her, so knowing the true limit may be helpful for her as well as for you.
You may also want to give her the phone number of a financial counseling agency where she can learn about options regarding her credit card debt and/or get support with making a budget and/or strategies to avoid impulsive spending.
Create A Plan With Your Daughter To Help Her Transition Into Her Own Space
Rabia Khara, is a marriage and family therapist specializing in adults, couples, and families, she is also a drama therapist and mindfulness meditation teacher.
Dear Dave and Erika,
Based on the information you shared about your daughter and not knowing the underlying emotional components [of] her desire to stay at home outside of financial reasons, I will have to commend you both for taking the first step in asking for help.
It seems as though you are doing your best to support your adult daughter and the support has come with a heavy price tag for you two. In a situation where adult children move back home due to financial reasons, real-world rules still apply. That means having conversations around budgeting, paying rent, contributing toward utilities, and having a plan to move into a space [of] her own or with a roommate.
I would encourage you to create a plan with your daughter to help her transition from your home into her own space with the expectation that she has to be fully responsible for her finances and that this is to help her lead an autonomous existence and be independent. I would also recommend giving her the emotional support, nurturance, and safety that she may need during the process without expectations.
I would explore the emotional aspect of her need to remain with you as opposed to having her own space as well to gain a better understanding [of] her mindset. If there is an attachment with either of you, being there to guide her every step of the way will help in making this a smooth and successful transition for all.
Your Daughter Needs Financial Independence
Ashley Tran, Assistant Branch Manager, Fidelity Investments, leads a team of financial professionals who work with families in helping to reach their financial goals.
It sounds like your daughter is in need of some financial independence so that she can hold herself more accountable. Based on what was shared, it’s unclear if your daughter has a job and is earning an income, but if she’s not – I’d recommend she start there and find a job. If she does already have a job, perhaps she can find a side hustle that will allow for her to make additional income. Given her love of animals, she could look into something like dog walking or pet sitting.
Broadly speaking though, in order to get ourselves into an ideal financial position, it is important that we act our wage! That means we identify our financial goals, define the action steps we need to take, and stay disciplined to that plan. That plan sounds easier said than done, so it’s important to embrace the value of self-control. I would suggest to your daughter that she think about purchases before making them – and try not to be influenced by media and ads. She could give herself a waiting period before making an impulse buy. For instance, instead of “if I feel like I need it, I have to have it now” – commit to waiting 7 days. If after 7 days, your daughter still feels like she needs to have it, then buy it. But she may surprise herself that with a little time and reflection, she realizes the purchase isn’t essential.
What do we mean by essential? Essential expenses are considered those expenses we have to pay to live our lives, such as shelter, food, insurance, cell phone, utilities, etc. At Fidelity, we recommend a 50/15/5 budgeting guideline which says approximately 50% of a person’s budget goes to these essential expenses, 15% goes to retirement savings, 5% goes to short-term savings like building an emergency fund, and the last 30% is for discretionary spending. The discretionary spending is the money for her “wants” – aka her shopping and dining out.
Your daughter may benefit from examining her discretionary expenses and setting a goal to save up for something she will truly love and value. For example, let’s say a person has 5 different video streaming services, but that person also wants to go on a beach vacation every year. Calculate how much money they could save in 1 year if they cancel some of those streaming services and all that money is that allocated to the vacation.
When a person is in debt like your daughter, it’s recommended to start paying off the high-interest debt first, so that often includes credit cards. But in the meantime, make the minimum payments on all debt, on time, to avoid penalty fees.
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