When adult children ask their parents for money, it
creates a quandary: To give or not to give?
For T. Scott Gross, a motivational speaker and management
training consultant in Knoxville, Tenn., the choice is easy: "My answer starts
at no, then hell no, then, over your dead body," he says.
an answer is nothing new for his grown son.
"Because we made
him financially responsible for himself at a young age, he learned to go out and
earn the money that he needed to get what he wanted," Gross says.
parents may want to say no to such requests, but don't know how. Others can't
decide when to say yes and when to say no.
advise parents to first think about whether they can afford the gift or loan.
With retirement costs skyrocketing and life spans increasing, even people who
consider themselves wealthy may find themselves running short on cash as they
Then, parents need to ask themselves some hard questions
about their own motivations in providing help and assess their child's motivations
in asking for help.
"We distinguish between financial assistance
that will aid in making an adult child more independent and assistance that will
just enable that child to remain dependant on the parent," says Eileen Gallo,
who authored "The Financially Intelligent Parent" with her husband, Jon Gallo.
"But still, if you can't afford to help, don't do it."
Fishman, an independent financial adviser in Los Angeles, agrees.
matter what steps you take to secure your own retirement, having a dependent adult
child or children is one thing that can absolutely torpedo your retirement," he
says. "Many parents have a hard time distinguishing between their children's wants
and needs and spend way too much money fulfilling their wants."
you afford it?
Any money you give or lend your children should be beyond
what you need to maintain your lifestyle and meet your goals for saving, which
should include an emergency fund and substantial assets saved for retirement.
Most experts recommend that you save between three and six months of your salary
in an emergency fund that you can dip into, should you lose your job or experience
some other type of financial emergency.
Take a look at your
living expenses and ongoing bills as you weigh your ability to afford a gift or
loan. If you are struggling to make ends meet every month and owe money on your
credit cards, you probably shouldn't be giving away money.
having to say no to a child in financial need is difficult, putting yourself in
a precarious financial situation won't help. In such a case, you may need to be
cruel to be kind, because bailing your children out of financial messes isn't
usually the best course.
"Parents should approach financial
tough love with the attitude that this is a learning experience, perhaps for everyone
involved," says Carolyn Kaufman, a psychologist and professor at Columbus State
Community College in Ohio. "Adult children who continue to ask for money from
parents haven't yet mastered the ability to manage their own money and many won't
until their parents force them to do so."
Everyone is profoundly influenced by the financial attitudes
of his or her parents and even grandparents. Every family has its own belief system
about money and those attitudes frequently cause conflict in family relationships
between spouses, siblings, and parents and children.
have our money scripts," says Ted Klontz, who authored "The Financial Wisdom of
Ebenezer Scrooge: Five Principles to Transform Your Relationship with Money" with
his son, psychologist Brad Klontz and certified financial planner Rick Kahler.
of us never stop to think about where our ideas come from about money and how
to go about separating the emotions from the thoughts," he says.