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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, March 14, 2013

When is It Time to Cut the (Wireless) Cord?

Wall Street Journal:  When Adult Kids Stay on Their Parents' Cellphone and Entertainment Accounts:

BookGetting grown kids out of the house these days is hard enough. Nudging them off the family cellphone plan—or out of an iTunes or Netflix account—can be even harder.

For increasing numbers of parents, the question of how much support to provide an adult child is no longer just about rent subsidies or car payments. The calculation is now complicated by the new maze of subscriptions that allow even far-flung family members (with the right password) to piggyback on a parental account well into their working lives....

More than 2 in 5 parents of 18- to 35-year-old children still pay for their kids' cellphone service, and 29% continue to do so even after their kids have moved out and stopped relying on them to pay rent. ...

Providers offer incentives for kids to ride along. Opening a new account for one cellphone at Verizon, AT&T and Sprint typically costs two to four times more than adding one more phone to a family plan, and Verizon and AT&T allow up to 10 cellphones or tablets on a single account. ...

Of course, parents' outlays for phones and entertainment are dwarfed by the cost of college tuition or paying the rent for young-adult children. A 2011 survey of 400 parents by Vibrant Nation, a website for women 45 and over that conducts research on baby boomer spending, found 39% of them still pay housing costs for children ages 18 to 30. "There is no Dr. Spock for raising 20-somethings," says Stephen Reily, founder of Vibrant Nation. "There is a fair amount of doubt and even embarrassment among parents about whether they are doing the right thing." Parents' spending on phone, music, video and remote Web service is small by comparison, averaging $108 a month, according to the Harris poll....

[Jeffrey Jensen Arnett, psychology professor at Clark University and coauthor of When Will My Grown-Up Kid Grow Up?] suggests parents who want to wean kids off the family cellphone account can use humor, asking, "I was just wondering what you see as the end point? Obviously, you're not going to be on my cellphone plan when I'm 90 and you're 60." If an adult child seems unmotivated, this can be a "springboard to a larger and more serious conversation" about setting goals.

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For what its worth, we drew the line with free monthly cell phone service on our AT&T plan. Our two grown kids buy their phones and reimburse us for the monthly data charge and the phone upgrade charge. So far, it's worked.

Posted by: Elmer Stoup | Mar 19, 2013 7:38:50 AM