Don’t Tell Mom You’re Running Out of Cash: Steer Clear of Your Parents’ Financial Generosity

When tough times hit us in our twenties… and let’s be honest, in our thirties, many of us are likely to turn to mom and pop to help us fix financial problems we are facing. Whether it is our student debt, our poor choices that caused us to get in over our heads with credit card debt, or a divorce that landed us on our rear ends, the best thing we can do for ourselves is to make every effort to not hit up our parents for cash.

As our parents’ children, even in our adulthood, we tend to look at them as mythical figures when it comes to cash flow. We think, hey, they’re retired, they’ve got those sweet pensions, cash saved up for a rainy day, 401(k)s, and their social security checks rolling in too. What we usually don’t realize—unless our parents are DuPonts or Rockefellers—is that our parents aren’t usually sharing their whole financial picture with us. What is really going on with their stock portfolios, mutual funds, and other savings is not usually fodder for the dinner table. Just as they made every effort to save us from the world as children, they are quite likely to want to save us from the world as adults—after all, how many times did they tell you as a child that no matter how big you got you’d always be their baby?

It’s one thing to lean on your mom and dad during a crisis as a last resort once or twice, but this can lead to a debilitating, habit-forming illness that can actually stunt your own financial growth. If you always have that idea in the back of your mind that “Heck, mom and dad will cover this if I can’t,” you are far less likely to stop taking serious financial risks that jeopardize your finances. Furthermore, it may very likely also keep you from making the effort to climb up the professional ladder and grow your level of expertise in your field. No one wants to be the oldest person working at Starbucks, and if you lean hard on your parents, this person could be you—despite a college education.

And then there’s the emotional strain that asking for financial assistance can place on the relationship you have with your mom and dad. When you borrow money from your parents, you are opening up the door for them to ask questions about how work is going, did you make your car payment on time, where is your life going, and so on. While it is usually true that parents are likely to ask this line of questions anyway, when they have only an emotional investment in you rather than a financial one, your life as an adult can be… more adult-like.

And the final zinger is what happens to your personal credit score. If you are always in a financial bind and leaning on your mom and dad (or other people) for cash, or you’re just a signer on one of their credit cards, you are not building credit. That means when it comes time to buy a car, a house, or just apply for a garden variety credit card, your credit score or total lack of credit could keep you from enjoying the things that other adults who are moving away from dependence on their parents are privy to.

Unfortunately, unless you plan to live in a tent in the woods completely off the grid (not that there’s anything wrong with that,) then you need to have established credit. And whether you know it yet or not, bad credit is better than no credit at all. At least if you have some credit, you can build yourself back up. It may not be an easy climb, and you may have to pay higher APRs for a while, but it’s well worth it when you consider that the “bank of mom and dad” won’t show up on credit reports, even when you pay them back on time, every time.

Please feel free to contact Ella Gray at ella.l.gray@gmail.com with any questions or concerns that you may have.