CAREERCOLLEGE

Developing Financial Independence in Adulthood

Managing your money is an essential step in entering adulthood. There are many financial variables to navigate, especially if you’re looking to enroll in college. Many parents end certain financial support at 18, which can be an overwhelming change during an already hectic transition into independence.

Family Discussion is Important

To start, consider some of the following questions: Is your family going to pay for your tuition? What about incidentals like groceries, rent, or spending money? If you’re suddenly in a situation in the middle of pursuing your degree and your parents rescind financial support, are you equipped to deal with that? Knowing these things prior to entering college is essential to be able to plan. Let’s say you must pay your own rent when living off campus, but you don’t plan on working during the school year. You’re going to need a large amount of savings to last you through the year. But if you were not expecting the responsibility of rent and you’re suddenly faced with needing to pay it yourself, not working may not be feasible.

Starting the Conversation

These conversations are going to vary based on family dynamics and existing financial responsibilities. Some people remain financially dependent on their parents well into adult life, but that’s not an option for everyone. It’s best to gain mutual understanding about monetary relations sooner rather than later. If you wait until a financial crisis, stress and emotions may affect the ability to have a clearheaded discussion. Make sure your parents are aware that you are looking to have a serious sit-down talk to ease them into the idea. Money can be a sensitive topic, and navigating the dynamics of a parent-child relationship can complicate communication. If you have older siblings, you might be able to plan your approach based on observations of prior scenarios. Writing down what you plan to say or specific concerns you have beforehand can guide the discussion. If your parents are offering monetary support, genuine gratitude is a powerful tool for easing arguments.

Offering Alternatives or Compromise

If you believe that informing your parents of your financial independence plans could jeopardize your financial situation, talk with your financial institution about opening a new solo account to manage your expenses.

A good option is to work out a payment plan where your family takes on a portion of your debt or payments temporarily. Or if your parents are looking for an incentive to invest in your education, promising academic focus and effort could be a good way to ensure their money is well spent. Ultimately, whether you’re pursuing higher education or not, financial literacy is a skill that will serve you throughout your adult life. Whether you're independent or not, awareness of your financial situation is essential to success.

Sources:

https://due.com/financially-independent-as-a-college-student/

https://www.quicken.com/blog/7-steps-from-college-to-financial-independence/