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 recent 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 23 years of professionally guiding
clients, here are seven points to ponder based on an acronym for RESPECT.

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”?

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?

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.”

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.

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.

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.

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?

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.

Let’s Have a Conversation!



LEAVE A REPLY

Please enter your comment!
Please enter your name here