Financial Umbilical Cord or Lifeline? 7 Discernment Tips for Assisting Adult Children
We are a blended family with four children. It was far from easy to deal with financial decisions as they grew up. Now ensconced in their adult lives, it continues to be challenging to discern if, when, and how to financially walk alongside them. Can any of you relate?
A survey by Bankrate.com found that 51 percent of Americans are sacrificing their retirement savings to free up money to assist their adult children. Right or wrong is not for me to decide. I do know that any decision needs to be based on respect. Respect for yourself and respect for your progeny.
To me, respect involves honoring a person’s life journey and providing a conducive, positive environment for them to unfold their potential. There is no set protocol for what this looks like in each person’s life.
Given my personal experience as well as over 25 years of professionally guiding clients, here are seven points to ponder based on an acronym for RESPECT.
Resources
Airline attendants instruct us to put our own oxygen mask on before assisting others. We need to do the same with our financial resources.
A very personal question: Do you have enough to cover your needs and reasonable desires now and down the road?
This requires planning from both the quantitative element as well as basing the numbers on foundational values. What is your personal perspective on “enough”?
Ego
If you are financially assisting your adult children – what are they using the money for? We have a generation that was born into relative prosperity. They have little perspective on the difference between a need and a want.
The media and the life of ease they see around them leaves them feeling entitled and “lacking.” Making ends meet may not be “easy” today, but comparatively, we live in opportunistic, abundant times.
You may also need to look at your own ego – do you feel your adult children are a reflection on you? Do you need to keep up appearances?
Soul
Assisting a child with a soul need could play out in helping them get a business off the ground after reviewing a well laid out business plan. It could be investing in their continued education or supporting them while they do volunteer work.
There may be health circumstances or career choices to consider. There is a fine line and it requires you to know your child really well. It means deep communication and discernment on the part of the parent. Ask questions around “why,” before focusing on the “how.”
Pain or Process
No parent enjoys watching their children struggle or experience pain in life. However, we rob them of their financial integrity and growth opportunity when we don’t allow them to experience some of it.
How much financial pain is needed to facilitate positive growth? Again, a very personal question around boundaries and tough love.
The struggle is necessary. It is OK. It develops character assets such as resiliency, resourcefulness, creativity, work ethic. Like the butterfly emerging from the chrysalis, or chick emerging from the shell, the struggle makes us stronger.
Entitlement
To quote my own book, “The entitlement mindset starts as a small weed, but if untended, grows like Cheatgrass, consuming the beauty of relationships and wreaking havoc on lives. It is a tenacious barrier to a healthy financial future, no matter where you lie on the spectrum of financial wherewithal.”
If you are assisting an adult child and you sense they feel they have the “right” or claim to your financial resources just because they were born to you, you are treading on thin ice. Elder abuse is on the rise – sadly, by family members. As you age, you want your kids to respect and protect you.
Control
What are your motives in assisting your adult children? Heed the wisdom of Warren Buffet:
“I’ve seen people try to steer their children, and the worst thing you could do is use money to induce given behavior with kids. I told my kids they don’t have to do anything […] finish college, become doctors or lawyers. […] I told them to use their talents in whatever form they think will create the greatest net benefit to society.”
Search your heart and make sure you have the best interests of your children in mind.
Timing
Now or later? If you have the resources to share with your kids, do you want to invest in their lives now, or upon your demise?
Currently, you can give $15,000 a year to anyone you want. A married couple could give $30,000 away. Wisdom needs to precede creative implementation.
How much is enough? How are you preparing them? How do you minimize entitlements and expectations mentioned previously?
Let’s Have a Conversation:
What is your stance on financially assisting grown children? Do you do it? Why? How do you decide which endeavor to finance? Have you encountered “entitlement” in your children, and how do you deal with it? Please share in the comments below.
Tags Adult Children
I am dating a wonderful man, he is widowed and so am I. We are both 73. He lives 4,000 miles away, but we are together every 3 months or less. He has no inclination to move here, as he has 3 grown (50 yr old) daughters and 8 grandchildren that live in the same small town. His family is very involved on a daily basis. He neglects what he needs for his home and for himself, and gives them his money. One partner in each of the 3 relationships have never worked, and he pays for homes, meals, parties-etc. It bothers me that his home is in disrepair and he does without; but I understand he gets joy giving to them. It is clear that they are the priority; and although we have been dating for 2 years; I feel like I am wasting my time. I would like a “partner” in life. I am financially very well and I do not need a “provider”. Not sure if I should throw in the towel and look for someone who can meet my needs. Am I being too selfish. I have a son and daughter, same age as his. They spend time with me, but not so “enmeshed” and are independent in their lives and finances.
Connie – If your needs arn’t being met, you may want to consider what this relationship is about. Finances are a reflection of other, deeper issues. Sounds like he has enabled his kids in unhealthy ways. I would talk to a financial therapist to determine how these issues are impacting your potential for a healthy relationship. You are not selfish. Congratulations on having financially independent kids
Warm regards – Danielle
I know that at age 64 I’m “supposed” to be a rich boomer with tons of money to be able to give to my adult children. I know that is actually the definition of a “good parent” now in professional/managerial circles. Good parents have money. They send their kids to private schools and camps, buy them cars, pay their college (and grad school) bills, throw them lavish weddings, give them down payments for houses, set up college funds for their grandchildren .Among the college educated class, this is what “good” parents do. It’s actually just what RICH parents do.
I was divorced twice and got no spousal support and very little child support. I’ve endured two bankruptcies, a foreclosure, and a car repossession–incredibly traumatic events all. I’m broker than broke. I haven’t had health insurance in 13 years, since Obamacare quadrupled premiums and deductibles for older self-employed people in the expensive states. Next year when I turn 65 I will take only Medicare Part A, the free part. I can’t afford anything else.
I live on $1,271/month in social security with no other income and no assets to draw down. I had to leave the country and move 2,000 miles away to South America to be able to live at all. Now I can see my children and grandchildren at most once a year. I used to be a hour away by car.
I want an article about how older single women with no assets and low incomes are supposed to survive, and how we can still be regarded as good mothers even if we have no extra money to throw at our children. Even if GOD FORBID, those children might have to help US. It used to be that children felt a moral obligation to assist their elderly parents. (Of course this is still true in many parts of the world.) In the US, if you’re an elder who actually needs support from your kids (who may be doing VERY WELL, I might add), you are considered a massive loser.
I have a friend from Bangladesh who raised her kids alone. As soon as they graduated college and got their first jobs, they each started sending her $500/month without even being asked. American kids are not at all grateful for what their parents sacrificed for them, and see no need to compensate them for those sacrifices in any way. In fact, they want the parental gravy train to keep on rollin’.
Deb, I could say the same about a lot of British children. Take for instance my sister in law and her partner who have 3 adult children still living at home, 2 sons and one daughter. They pay nothing towards the household bills, don’t do their own laundry or even make their own lunches for work. Claim they can’t afford to move out yet they all have 3 holidays a year, new phones, credit cards and the youngest son has a 5 figure loan out on a car. Food deliveries every evening because they don’t like mum’s cooking and the daughter is an extreme vegan. They had to partition part of a room off to create another bedroom for the eldest son as his younger brother refuses to share with him (it’s only a 3 bedroom house).
Sister in law doesn’t think it’s fair to charge any of them rent, so they have no idea about budgeting to live. Problem is, she was exactly the same, couldn’t manage money so was constantly going to parents for loans which suited my late mother in law as she used it as a means of control. It’s learned behaviour as she is doing the same to keep her 3 as dependent kidults.
Husband’s brother is still living at home with his father rent free at the age of 53 and I can see my sister in law’s 3 following in his footsteps if they carry on like this. It’s downright bad parenting at the end of the day, they haven’t been taught essential life skills.
I went through some very lean periods with my husband in our 20s and 30s and my late dad would offer to help us financially. We always refused on principle as he had earned and saved what little money he had so he deserved to enjoy it. If we got into difficulty it was up to us to get out of it. I also gave up work for a time in my early to mid 40s when my dad developed vascular dementia and needed 24/7 care. The way I saw it my parents did everything they could after WW2 to provide for their 4 children and they encouraged us all to try hard at school and get as good an education as possible. It was only right we should help towards the end of life.
Deb,
A good parent is not a financial enabler. I am sorry you feel what society looks at as a “good parent” is a cash cow that just shovels out. Some people have more, some have less and a good parent is one who encourages their children to become contributing members of society, make good financial decisions, take responsibility for their actions and be independent. I know wealthy people who have set good boundaries and raised respectful, independent children and I know people of little means who have bought into an “entitlement” mentality. I know some kids who are very grateful for support their parents have provided and others who expect it and are unappreciative. I think it boils down to core values and societal norms. Time for some tough love! I tell people make sure you take care of yourselves – your kids will need to figure it out. Let’s keep having conversations.