By John R. Berry, CFP® & Beth H. Watson, CFP®
Many Baby Boomers and Gen-Xers are proud of the fact that we launched into life after graduating college or high school, never returning home to live with our parents or receiving any financial assistance.
A typical story is that “we”—including the Gen Xers writing this article—didn’t start with much of our own, but over time were able to build comfortable foundations from which to coddle and spoil our kids.
Many criticize these “spoiled” kids for failing to launch, but the reality is more complicated. Wars, family dynamics and finances, education level,
country of birth, and legal barriers have always played a huge role in every individual’s life.
There’s a wide berth for reasonableness between marrying your child off at 10 (yes, still legal in some countries) and resenting that 50-year-old in the upstairs bedroom.
The number of variables make it impossible for us to declare a fixed definition of what “enabling” an adult child looks like.
For the most part, what matters is whether you fear you might be enabling your child, or if your gifts or the child’s dependence is causing family discord.
Here are some signs you might need to consider a family meeting.
These considerations assume that the child is mentally and physically able, and that the situation cannot be classified as “clearly temporary.”
- You feel like a “bailout” expert. Your child (or grandchild) is always coming up short to pay for necessities.
- People are upset. Your support—either financial, a living arrangement, a childcare arrangement, etc.—is breeding resentment among any or all people involved.
- You’re worried about money. You feel financially stretched, but still support other able-bodied adults anyway.
A financial planner can help you determine whether gifts to loved ones are within your means if you are not sure. An estate planning specialist can help you protect those who should not manage their own resources.
(As a side note, we’d also point out that poor money management usually gets amplified with large, inherited amounts. Educate your potential heirs and, if there’s a problem, try to head it off while you still have a chance!)
Thankfully, what we see most often is parents and grandparents who spend time with their loved ones and, when they do spend money, give it joyfully for experiences such as family trips.
Other forms of help that generally work fine include paying for college, helping with a modest first vehicle, providing apprenticeships or job connections, and even monthly financial support so long as the arrangement’s purpose is well defined.
Our clients enjoy being “Generous Givers” and “Fun Grandmas.” Fewer like being Bailout Experts.
Many families benefit not just from financial and estate planning, but also from family counseling to help sort out difficult emotions.
In short, every family is different, and what may look odd to you may be perfectly acceptable given another set of circumstances. Warm but straightforward communication can help to ensure that financial support relationships remain healthy for everyone involved.
Relevant reading:
FAQ Series Article #1: Should I take my money out of the markets?
FAQ Series Article #2: When can I retire?