'I Am No Longer Your Bank Account!' — Suze Orman Tells Gen Xers And Boomers To Cut Off 'Freeloading' Adult Children And Stop Paying Their Bills

Should you cut off your adult children financially, even if they struggle in today’s tough economy? Personal finance guru Suze Orman says yes, but it’s a controversial topic sparking debate among parents and financial experts.

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Orman advises parents to encourage their grown children to gain financial independence. In a recent interview with Moneywise, Orman stressed the importance of prioritizing one’s own financial security, especially for Gen Xers and baby boomers approaching retirement.

She highlighted the significant financial support many American parents provide their adult children. Nearly half of young adults receive financial help from their parents. This trend is more prevalent among Generation Z (ages 18-27) and Millennials (ages 28-43), with parents providing an average of $1,384 monthly. This financial support often covers essentials like groceries, rent, and health care and includes nonessentials like vacations and discretionary spending.

"It's not up to you to cover your adult kids' bills," Orman said. She urged parents to communicate clearly with their children: "I am no longer your bank account! I’m getting to the point where I need my money to be able to support myself. You are old enough now to go out and figure it out. So don’t come to me for money."

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Orman also addressed the broader challenges of retirement planning. In a May 2023 blog post, she noted the increase in adult children living at home compared to previous decades. "If that's happening in your home, I sure hope you won't let your adult kid freeload. That's not generous to you or to them. Adults don't freeload."

She emphasized the importance of maximizing retirement accounts to ensure a secure retirement. Orman explained to Moneywise that compounding is the main "ingredient" in any recipe for financial freedom. By investing early and taking advantage of tax-friendly accounts like 401(k)s, traditional IRAs, or Roth IRAs, individuals can significantly grow their retirement savings.

She also advised taking a hard look at expenses. High living costs can hinder retirement savings, so reducing unnecessary spending is essential. "We are no longer your bank account," Orman reiterated, suggesting parents use this line if finances are tight. 

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Those with ample funds should still teach their children about financial responsibility. In fact, the Institute for Family Studies found that higher-income parents are more likely to provide significant financial support to their adult children compared to lower-income parents. Even for those households, this financial assistance can strain parents’ retirement savings, as many contribute more to their children than their own retirement funds. This can lead to increased financial stress and the potential for inadequate retirement savings.

It’s important to recognize that today’s economy makes it tough for young adults to become financially independent. High housing costs, student loan debt, and stagnant wages are significant hurdles. As parents, it can be hard to see your kids struggle, and wanting to help is natural. Talking to a financial advisor can be a good idea — they can help you understand your finances and create a plan that balances your retirement needs with your desire to support your children. Whether you follow Orman’s advice or provide financial help, the key is to make thoughtful decisions that align with your values and long-term goals.

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