There has been a ringing in my ears this month… and it wasn’t Santa’s sleigh bells. It started with a dismaying story from a couple supporting their thirty-something year old and the repercussions they are beginning to recognize. They are stressed about how it is going to affect their ability to retire: the husband had a stroke a couple of years ago and doesn’t know how much longer he will be able to work. The next story came from an adult child mad at his mom. “She just won’t stop,” were his words. He was referring to the financial support she has been giving his thirty-something year old brother. He is worried about her livelihood and ultimately his relationship with her - it is getting to the point he doesn’t even want to go see her. Then another woman broke down in tears, not knowing how to say “no” after so many times of saying “yes.” She knows she is on her last leg and will have to work forever if she can hold up. After all, she is also the caregiver for her own mother, which has not only been extremely emotional, but has taken quite the physical toll on her body. And finally, I spoke with a couple worried to death that they will die. They don’t know how their grown children in their fifties will make it without them. They are still supporting them. They are sure they will just blow any money they inherit and then what?
Given these encounters, I should not have been surprised when I read the study Age Wave by Merrill Lynch this year. It found that two-thirds of parents with adult children over the age of 21 are providing support to those adult children. But yes, I was surprised! Two-thirds! 67%! This is what they call a crisis.
Being a parent is tough. It is your instinct to love your children unconditionally, support them in whatever they need, and protect them in any way you can. You put them before you. But helping them doesn’t always help them. And when it is financial help, it sure doesn’t help you.
Do you remember when you were young and starting out? Do you remember struggling at times, having to make tough choices about what you could or couldn’t afford, or figuring out how to work your way out of debt? What kind person has this made you? Did it make you or break you? Did it teach you, change you? What kind of wisdom do you have now that you would not have had if you didn’t go through this? I am betting that what you gained from those experiences was worth millions more than the temporary pain and strain you felt during that time. So if you don’t allow your children to go through some of these trials on their own, what are you really giving them? Or are you depriving them of gaining skills that they will need to survive?
Let them face their challenges head on. Let them learn the importance of budgeting and watching their pennies. Let them have to make choices and at times settle for less or even go without. Let them have the same pride and wisdom you have today because of the fact that you did it—no one did it for you! This gift goes so much further than any amount could give your children. I believe they call this “tough love.”
Do you want them to be dependent on you until the day you die? Then what?
Where are you going to borrow money when you are retired? They can borrow money. Is it not okay for them to do it the way you did it?
You may plan to work forever, but what if you can’t. Do you want to be a burden on them when the money runs out? Will they support you? Will they be able to?
Give them tools. We have thousands: app recommendations, articles and interactive worksheets, seminars, samples, their own online “LIFE PLANNING TOOL.” Teach them how to budget. Teach them about debt. If you want to pay for something, pay for a session with your financial advisor so they can get on the right track early.
I know you are the last person you tend to think about when it comes to your kids, but you need to think about yourself. Not only could you ruin your kids’ independence by giving them money, you could ruin yours. That study I shared with you earlier also said the average amount of support in a single instance was $6,800. I want you to think about what that amount really equates to. If you took that same amount of money every year for the next ten years and invested it to target an eight percent return, you would have almost $100,000 in an account. Who doesn’t need this for their retirement?
It is called tough love for a reason. It isn’t easy to say “no.” It will never be easy! But the consequences of not saying “no” are way worse. It not only affects you and the child you are supporting, it affects the entire family and ultimately could permanently damage the one thing you want more than anything else—good Christmases and Thanksgivings.