It’s not uncommon for parents to financially support their adult children, especially considering the high cost of living and high housing costs. In fact, according to a study from Savings.com, half of parents with adult children give them some financial support, providing an average of $1,474 per month.
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However, nearly 40% of parents who support adult children financially are planning to stop in the next two years, according to the study. Here are some ways to budget for the change.
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Assess Current Budget
You can be empowered to make any necessary financial changes when you first have a detailed picture of your financial situation. Do you know your monthly take-home income, payments and debts? How much do you spend on food and shopping?
Break down your expenses and evaluate each area. Remember, sticking to a budget can have long-term positive impacts on your finances.
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Start Building an Emergency Fund
If you don’t already have an emergency fund, start building one — even if you think it’s a small amount. Without immediate parental help, a solid emergency fund is integral to financial well-being and security.
Without any savings, even minor financial changes can set you back, so getting an emergency fund started is crucial.
Downsize, Share, Consolidate
Without parental help, covering costs like rent or debt payments could become a struggle.
Whether it’s downsizing your living situation, sharing costs with a roommate or looking into finally consolidating your student loans, you’ll see firsthand how these adjustments have a compounding financial impact month over month.
Eliminate Unnecessary Expenses
Consider what’s a want versus a need. Do you default to ordering out for most meals and grabbing a coffee every other morning? Evaluate the seemingly minor charges that add up by the end of the month.
And don’t forget any unused, recurring charges like streaming services.
Sharpen Skills
Whether we want it or not, change can often be the catalyst for growth. Now is a great time to either strengthen your skills or learn new ones that can lead to opportunities and increased income.
Research any in-demand skills that overlap with your own skills and interests, and be open to the possibilities that may come your way.
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Source
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Savings.com, “Percentage of parents financially supporting adult children reaches a three-year high.”
This article originally appeared on GOBankingRates.com: Some Parents Are Going To Stop Supporting Their Adult Children: 5 Ways To Budget for the Change
