Professor warns parents: easy mobile payments to children can strain finances

A finance professor has warned that using mobile payment apps to give money to children can destabilise a parent’s own finances, according to a report by Finnish broadcaster Yle.

Panu Kalmi, professor of economics at the University of Vaasa, said parents and children should openly agree on clear rules for financial support. He recommended providing a fixed monthly amount instead of ad-hoc transfers to help young people achieve financial independence and avoid dependency.

Many parents use apps like MobilePay or messaging services such as WhatsApp to send money when children request it. Yle previously reported on a mother who accumulated debt after regularly transferring money to her adult son via MobilePay and paying his bills.

Kalmi noted that while it is normal for parents to support children financially, both as minors and young adults, problems arise when the parent’s own financial stability is at risk. Mobile payment apps make transfers easier and faster than cash, increasing the temptation to give money without consideration.

As children become independent, the need for support should decrease, Kalmi said. Otherwise, a dependency on parental assistance may develop, which is unhealthy for both parties.

“The child may not see the parent’s financial situation. They may only think of their own financial distress,” he said.

If a child frequently requests money unexpectedly, and the parent suspects issues such as substance abuse or gambling, the matter should be discussed openly. Kalmi advised that good, balanced support is based on clear rules that both parties follow.

Parents should ask why they are constantly being asked for money, he said. Both parent and child should discuss financial matters face-to-face, not via phone.

“When a child is about to leave home, parents and children should have a conversation about money management. This is also a good time to set rules on how to provide support and how not to,” Kalmi said.

If a child consistently exceeds an agreed amount, this should also be addressed. Kalmi warned that a lack of open communication could ultimately endanger the finances of both parties.

He recommended a fixed monthly sum as the best way to provide support. For minors, Kalmi encouraged parents and children to create a monthly budget together, outlining what the child’s money should cover and how much can be given.

“Not so that money is given randomly, but a monthly budget is made according to which money is used,” he said.

Before a child moves out, they should review expected monthly expenses for independent living. Many young people starting studies may not have a clear understanding of costs until they experience them firsthand, Kalmi noted.

Monthly budgeting can be facilitated by mobile apps such as the Takuusäätiö’s Penno. Children who receive pocket money at home may become accustomed to receiving money from parents. Young adults moving out should practice daily tracking of income and expenses and monthly budgeting.

Parents may provide regular support, such as covering rent or bills. Loans to children with repayment agreements are also an option. Young people learning independence should be taught the importance of maintaining a financial buffer, even a small savings sum, to cover unexpected expenses of €20–50 without destabilising their finances.

Kalmi stressed that parents should feel able to refuse requests for money. “Giving money should not be a substitute for conversation,” he said.