Financial Planning for Adult Children: Helping Without Hurting Your Own Future

Written by Steve Landers & Shara Cox

Many parents want to give their children every opportunity to succeed, and increasingly that support extends well into adulthood. Whether it's helping with a house deposit, contributing towards private school fees for grandchildren, covering university costs, or assisting with everyday living expenses, financial support has become a common part of family life.

The Growing Financial Burden on Parents

Rising property prices, higher living costs, and mounting financial pressures have made it more difficult for younger generations to achieve the same financial milestones their parents enjoyed. As a result, many families are stepping in to bridge the gap.

While occasional assistance may be manageable, ongoing support can quickly add up. Small contributions that seem affordable today can have a significant impact on your retirement savings if they continue over many years.

Put Your Own Retirement First

One of the most common mistakes parents make is prioritising their children's financial needs ahead of their own retirement planning.

Unlike your children, you cannot borrow money to fund retirement. If helping family members means reducing superannuation contributions, drawing excessively on investments, or taking on debt later in life, it may place your own financial wellbeing at risk.

Before offering financial assistance, consider:

  • Do you have sufficient retirement savings?

  • Will the support affect your future lifestyle?

  • Do you have adequate emergency reserves?

  • Could unexpected health or aged care costs arise later?

Establish Clear Boundaries

Financial assistance is often given with the best of intentions, but unclear expectations can strain family relationships.

Before providing support, have open discussions about:

  • How much assistance will be provided

  • Whether the support is a gift or a loan. Loans are generally our preference as they

    • can protect the amount in the event of their relationship break up; and

    • they act as an asset of your estate, which is important to square up other beneficiaries

  • How long the arrangement will continue

  • Any expectations around repayment, this should be noted in the loan agreement.

Documenting larger financial arrangements can help avoid misunderstandings and ensure all parties are on the same page.

Understand the Tax and Estate Planning Implications

Significant gifts or financial assistance may have broader implications for your overall financial strategy.

Large gifts can affect:

  • Centrelink entitlements

  • Estate planning outcomes

  • Family asset distribution

  • Tax considerations in certain circumstances

Seeking professional advice before making substantial financial commitments can help ensure your support aligns with your broader financial goals and avoids unintended consequences.

How Salt Financial Group Can Help

Providing financial support to adult children can be a rewarding way to help the next generation, but it's important to ensure your own financial future remains secure. At Salt Financial Group, we can help you assess the impact of gifting money, assisting with a property purchase, funding education costs, or providing ongoing family support as part of your broader financial strategy.

Our advisers can work with you to create a plan that balances your desire to help loved ones with your retirement goals, cash flow needs, estate planning considerations, and long-term financial security.

If you're considering supporting your adult children financially, contact the team at Salt Financial Group to discuss how we can help you support your family while protecting your own financial future.

Jenni Anderson