And that is my point when I share this story. My daughter did fine. And most kids will do fine without parents’ help, too.
Sometimes, parents are wedded to the idea that they are so important in their children’s lives that the kids can’t get along without them. They want to stay relevant. But there are better ways to be relevant in your children’s lives than to encourage them to depend on you.
Barbara Schelhorn, a colleague of mine here at Sullivan, Bruyette, Speros & Blayney, notes that when people have problems saying no to their adult children’s requests for money, it’s usually because the parents are people pleasers with a strong desire to make their children happy. “They want their children to love them and to view them as a good mother or a good father,” Barbara says. “Every parent wants that, of course, but when that desire is too strong, when the relationship is out of balance, there are going to be problems.”
At this point, there are two separate questions: (1) Does the money they are giving jeopardize their own financial health and future? (2) Does doling out cash really help their child? If a child has a health problem or a setback of some other kind, that’s one thing, but often the child’s dependence is based on a dynamic between the parent and child. If the amount of money they are gifting is small enough (or if they are wealthy enough) that it has no significant negative impact on their finances, then their continued support may be fine. But for many people, that will not be the case: The amounts are large and the impact is likely significant.
Even if clients are able to afford the cash, they still need to answer the second question: Are you really helping your child when you allow her to remain dependent?
Am I Jeopardizing My Own Future?
Entry into the adult world can be tough, and many parents try to soften the blow for their children. They don’t want to think of their kids sitting in a tiny apartment eating instant Ramen (even though that’s what they did), so they pony up until the kids can get on their feet. The problem comes when kids don’t pull things together quickly, or at all, or when parents’ contributions threaten to undermine their own financial security. Most couples nearing traditional retirement age need to continue to work, and they are having to work longer, only because they spend so much money trying to keep their children going.
More young adults are living with their parents than at any time since 1880. Among 18- to 34-year-olds, just over 32% are living with their parents.
It’s even more problematic when it’s older kids in their 40s, 50s or 60s who depend on their parents. In some instances, the children may simply not realize the toll they are taking on their parents’ finances. They figure their parents have enough money to go around, and never stop to consider that Mom and Dad may outlive the wealth. Parents who’ve always provided for their children may be unwilling or unable to say no.
When clients are making decisions about whether to come to their kids’ financial rescue, it’s helpful to think through all the outcomes of their decision, specifically the things that they don’t want to happen. For example, clients may never want to be dependent on their children or have the kids change their own plans so they can care for the parents later in life. Once they are clear about the worst-case scenarios they want to avoid, the clients can make sure they are heading toward an outcome that they do want. And if laying out large amounts of cash to help children reach their immediate goals will jeopardize their long-range plans, then clients may be undermining their offspring’s future happiness as well as their own.