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Is it OK for Mom and Dad to Pay for Your Cell Phone?

NEW YORK (MainStreet) —The recession forced countless millennials into boomeranging back home with their parents to save money. But even some of those adult children who are gainfully employed, financially independent and perhaps even engaged or married still piggyback on the family cell phone plan. In fact, 29% of parents of 18- to 35-year-old children continue to pay their cell phone bill after their kids move out of the house, according to a Harris Interactive survey of 620 parents for the Wall Street Journal.

Kristin Serio, a 24-year-old account executive in Orlando, Fla., is part of this trend. Her grandparents paid her college phone bill through college graduation, when her parents added her to their plan, which includes unlimited data, talk and web. Serio says she’ll eventually start her own family plan once she gets married or her three-year-old son is old enough for a cell phone.

“But until that happens it’s very nice to not have to worry about [the bill],” Serio said.

Susan Newman, a New Jersey-based social psychologist and author of Nobody's Baby Now: Reinventing Your Adult Relationship with Your Mother and Father (Walker and Co, 2003), says this dynamic is common. “While they have financial independent children, it’s still a way for them to feel like they’re taking care of their kids,” she says. “One of the issues is how complicated these cell phone plans are. In some respects, it’s less expensive and a lot easier just to keep your son or daughter on your plan.”

Still, that’s not to say that sharing a family plan is without complications. A mom blogger made headlines in December for having her teenage son agree to an 18-point contract in order to get an iPhone. Although Newman says that parents of adult children probably shouldn’t have their child’s smartphone password or review the list of calls, they should discuss who pays for overages in advance. After all, exceeding data caps or shared minutes can prove costly.

“As soon as you have a cell phone plan, you need to understand your data plan no matter who’s paying for it,” says Wendy Weaver, a certified financial planner with Bethesda, Mar.-based wealth management firm FBB Capital Partners. “It’s a good lesson you can use to teach your children about financial literacy.”

Serio says going over her allotted text messages prompted her parents to get an unlimited texting plan. Another time, her father emailed her about an extra $60 charge from a work call she made to Canada. She resolved that issue by getting reimbursed by her employer.

Some adult children reimburse their parents for their portion of the family cell phone bill. Kristen Barrett, a 26-year-old PR and marketing manager in Phoenix, Ariz. who is engaged and owns her own home, sends her mother $60 a month to cover her portion of the family cell phone bill. “My family does not talk on the phone very often, and if we do, it's usually to each other or other Verizon members, whom we can call for free,” she said.

Some older adult children actually pay for their parents’ or siblings cell phones instead of the reverse. Betsy A. Riley, a writer and artist in Maryland, says she and her husband pay for her brother in Georgia and her mother-in-law in Tennessee to be on their family plan.

“At the time, my brother was starting a new job and money was tight,” she said. “I could add him to my plan for $9, which was cheaper than he could get his own plan. We wanted my mother-in-law to have a cell phone for safety, and she wasn’t going to get one herself." This arrangement allowed Riley peace of mind while letting her avoid long-distance fees.

Despite the potential money savings of the family plan, experts cautioned that adult children should eventually get a cell phone plan separate from their parents to signal their independence.

“At some point, we all have to shoulder our own expenses without being under the umbrella of our parents … not prolong our adolescence,” says Weaver.

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