Kids are darn expensive.
I could rave on about the spectre of children’s parties, social trends and education expenses that loom before the mongrel family, but instead I want to talk about adult children. Those over the age of 18 – slightly lazy and unmotivated.
This series has a common thread. In each situation, we have the chance to say no, but we allow our money to be taken or used. In some cases, we actively give our money away because we deem that someone else has a greater need. There’s nothing wrong with that, as long as we understand our motives, and the consequences of our actions.
I wonder how many of us have given our kids a financial education? Or modeled good financial behaviour for nephews and nieces? I’ll do what I can for my daughter, by not hiding our financial discussions, and involving her when she’s old enough. I’ll ask her to do my tax projection before I send it off to the accountant, help me select my stocks (which may one day be her stocks), and go through any business renewals that we have to do. I intend on teaching her the kind of skills that will make adult financial decisions less terrifying.
So what is the reasoning that people use behind choosing not to address money with their kids? Life is busy, and it’s hard enough to sit down for a chat with a surly or quiet teen, let alone talk about boring old finances. But it is as important as having the birds and bees talk. Hopefully it’s also less painful. Who knows, maybe you could combine the two and traumatise your kids for good.
When you don’t teach your kids how to manage money, they usually either figure it out themselves (requiring help along the way), or they end up with their financial life being a complete dumpster fire, with credit as the fuel. Mum and Dad become the fall back – the safety net. After high-school, I didn’t have a clue about how to be an adult, and ended up back with my parents far too many times.
Let’s say your child (or nephew or niece) is an adult. They want money. Do you hand it out? Do you even know what it’s for? How heavily are you supporting them?
I don’t advocate booting kids out of home as soon as they tick over to 18, but I do think that if they aren’t showing signs of developing steady and thought out plans, then you need to do something to kick-start them. Your kids should not be moving out for the first time at 30. They should not come out of uni, thinking that they have all the time in the world to find the ‘perfect’ job, because Mum will pay for everything.
Managing money well requires restraint, thoughtfulness, and hard work. If you hand over cash on demand, or take care of major life expenses, then you are stopping your child from learning how to develop their skills and manage on their own. The difference between slipping your kid $50 when they pop round, and regularly paying their rent is vast. You cripple them by not allowing them to fail and work their way out of rough situations. You cripple yourself by letting your cash flow be frittered away.
What about when kids literally demand your money? When your kids have no clue about your financial situation, they may think that you are extremely well off. They might come to you with an argument that seems hard to refute – you should let them stay at home rent free while they are at uni, and you should give them a decent allowance so they can focus on studying. Sounds reasonable?
Not really. When someone lives at home during uni, they miss out on some pretty crucial moments. The most horrific one is living in a share house. Living with people you aren’t related to is a sure way to grow up fast. Sarah doesn’t flush the toilet. Tom is a compulsive eater. Jenny gives herself rousing pep talks in front of the hall way mirror at 5am. Harry thinks he’s in love with you and sings softly under his breath whenever you’re around. But don’t worry! It’s not all bad. Jenny’s boyfriend helps tutor everyone. Sarah is a keen gardener and keeps the yard looking amazing. Tom is a fabulous cook and loves to feed everyone. Harry is… there. Uni is a great time to learn what people are really like. It’s also a chance to learn that your laundry doesn’t just do itself. It takes time to cook a nice dinner. The vacuum cleaner actually needs to be emptied.
The idea that the kids need to focus on uni and not hold down a paid job is crazy. If they live with their parents, then they can easily hold down weekend or evening work. And they should absolutely be working over the summer break. In fact, I’d say it’s essential. The worst workers I have ever met went straight from uni into their first professional job. They had no clue that they wouldn’t immediately get amazing roles and tasks. They didn’t understand how to do basic admin tasks, and they haven’t run the gamut of terrible managers.
If you agree to fully support your adult child through uni, this is what they miss. They miss out on a three or four year training course on how to be an adult, and how to solve problems on their own. Money magically becomes a lot more precious when you have to work for it yourself.
If your child is begging or demanding financial assistance, then they might be pushing your emotional buttons in such a way that you feel like you’d be a neglectful parent if you cut them off. If your adult child is telling you they are frightened or feeling vulnerable or that they have nowhere to go, then how can you turn them away? Honestly, I would never be able to turn my daughter away. But I also wouldn’t want to enable any detrimental behaviour. It’s a fine line to walk.
How do you help your child to loosen their grip on your money? Encourage them to take more responsibility, and demand it of them if you have to. It’s no use just to tell your jobless son that he has a month to leave home. But if you tell him that he needs to find a job within the next month, after which time you’re no longer giving him any cash, you’re giving him a firm push towards becoming independent, without making him homeless. If he doesn’t get a job, don’t buckle. Don’t pay for anything he thinks he needs, beyond food and personal hygiene products. If he thinks he needs a suit for interviews, then give him a reality check. He can work in hospitality or retail until he saves enough to buy his own suit. Take him the local Op shop. Work hard to help your child become someone who is capable.
I think the key to getting an adult child to stop relying on you financially is to stop paying for all luxuries, and make their lives a little bit uncomfortable. They can travel 1.5 hours to uni using public transport – or they can buy themselves a car or move out. They need a haircut? Great, break out the scissors and watch them backtrack.
As a not-so-little aside, I want to talk about honesty and transparency. There are some things that kids don’t need to know about – all information needs to be age appropriate. But if you’ve never told your kids about your financial situation, you should probably start. Even if they are adults, and out of your house, let them know where you stand.
I don’t know about my parents financial situation. I don’t know how they got to where they are. I judge their financial decisions without ever knowing the background. They will never have a frank conversation about it, and there is nothing I can do about it. Don’t be like them. All I know is that if they die, I’m meant to find their papers and talk to their solicitors.
If something terrible happens to you, then your teenage or adult children are going to have to pick through your finances and work out what is going on without any guidance. There will be fights, there will be discomfort and there will be endless hours of your kid wondering how to get through everything.
Don’t lie about your situation. Sit down with your kids and talk to them. Tell them that you have superannuation, shares and a savings account. Tell them about your debt and what you wish you’d done differently. Let them celebrate the good things with you – like promotions and paying off major debt. Talk through the bad, like when you invested in a company thanks to Uncle Gary’s tip, and lost a few thousand.
It can be weird and embarrassing, but it gives them context and understanding. It also might just stop them from expecting you to fund their uni fees, their wedding and their lifestyle.
Stop being their ATM, and start parenting.