Money: A Double-Edged Sword

As parents, we always want to help our children. But at the same time, we don’t want to encourage our children to have a slack hand. That sometimes leads to tough decisions. We’ll talk about that today on MoneyWise. TO HELP OR NOT TO HELP? Some parents find great joy in helping their adult children financially, especially if a child has chosen a career field that doesn’t pay very well. It’s a joy that can be experienced while you’re still living, as opposed to leaving an inheritance. The problem is that many parents are willing to help their kids even to the point of their own detriment, even when it jeopardizes their retirement. A recent Bank of America survey showed that more than half of parents are sacrificing their own financial security for children who should be supporting themselves. More than 3 out of 4 parents said they provided at least some financial support to their kids when they left the nest. This inability to cut the financial umbilical cord can have a detrimental impact on both parents and children. The kids may begin to expect regular financial handouts and become dependent on them. So much for the joy of helping. And as that survey showed, many parents are likely to go beyond the occasional financial gift, creating a pattern that threatens their own financial security. Too much help can also jeopardize the parents’ marital relationship when one parent sees the need to put on the brakes, and the other wants to continue full speed ahead. In another survey by Bankrate, half of retired couples said they’d made or are making financial gifts to their kids that impacted their retirement savings. Sometimes this starts when the parents are in a strong place financially and they can easily afford helping their kids. But the recent pandemic showed that anyone’s income can be negatively affected by unforeseen circumstances. In an economic downturn, the kids may be expecting more help. At the same time, parents are less able to afford it. And many parents will be reluctant to share their financial difficulties with their children. The effects of unbridled giving to kids can have long term consequences. Not only can it prevent parents from saving enough for retirement, it may also condition the kids to expect a lifestyle they can’t afford. It may also lead them to make critical choices that inhibit their ability to earn more and become financially independent. All of this can also negatively impact the parent/child relationship. When financial support is expected, it’s often not appreciated. Parents may then resent being taken for granted. TIME TO PULL BACK? Now, you may know that you’ve been helping your adult children too much and enabling them to remain dependent, but you’re struggling with the idea of turning off the financial spigot. God’s Word has encouragement and advice: Proverbs 22:6 tells us, Train up a child in the way he should go; even when he is old he will not depart from it. It’s never too late to start teaching your children financial responsibility. And Proverbs 29:15 reads, The rod and reproof give wisdom, but a child left to himself brings shame to his mother. God wants and expects you to help your children achieve independence. In their book, Beyond Success and Failure: Ways to Self-Reliance and Maturity, Marguerite and Willard Beecher write that parents need to gain freedom from their children so that children can be free of their parents. The parent has to take the first step. They also maintain that parents shouldn’t do anything for a child that he or she might do for themselves and profit from it. So you may have a weaning process ahead of you. You might begin to give incrementally less to your adult but still dependent child or you can set a deadline when all financial help will stop. Either way, you’re likely to experience some bumps in the road, but the payoff will be worth it. Then, start putting the extra money you’ll have into your retirement account. When the day comes when you have to stop working, you’ll need it more than your children will. On today’s program, Rob also answers listener questions: ● Is it a good security practice to divide your money between multiple checking accounts? ● Can paying off loans cause your credit to drop? ● Would it be wise to extend the benefits of a whole life policy? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected]. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29