When our grown children need financial help and we have the wherewithal to make it happen, our decisions generally fall into one of two camps: Either "Yes! I'd rather help my child now than leave it to them later. " or "No! They're independent adults. They need to stand on their own two feet."
But real life has a funny way of coming along and moving us somewhere in the middle. The "no way" parents may see a well-conceived business plan and be asked by their entrepreneur-to-be to invest in the venture. Or the "Yes" parent may be asked to fund a dream-come-true trip around the world and demur, reasoning, "This is something my grown child should finance himself."
Readers of this blog may remember my friend Dick who refused to lend his daughter $1,000 to visit a friend whose mother had died but lent his son $10,000 to buy a boat. His calculus, he said, was not so much the use of the money but the fact that he had lent his daughter money on several occasions and she never repaid it. His son often borrowed money from his dad but he always repaid it. Clearly, the son's credit standing was higher than the daughter's.
Then there are friends whose 40-year-old, divorced son is struggling to gain traction in a creative field [filmmaking] and whose neighbor's son [food photographer] is going through the same hard time. When I blogged about that situation, I pointed out that my friends wanted to--and continue to--support their son's "dream," even though their son tells them he doesn't want to take their money and is not above taking on low-paying temporary jobs to help make ends meet. But they look askance at the neighbor, who supports his son, even though the son refuses to take temporary gigs and the son's wife, now pregnant with the second child, doesn't work outside the home, either. My friends thought the neighbor was being an enabler and should give the son a dose of "tough love" since he seemed to be making no effort to support his growing family.
When we decide whether or not to help support our kids or lend them money, there may be ostensible reasons for saying yes or no--an unworthy cause versus a desperate need. For many of us, though, our decision may hinge on whether we smell a sense "entitlement,"--that is, that our children expect us to open our wallet no matter the reason, request or need.
There's at least one more way to think about whether to loan or not loan.
Barbara Nusbaum, a New York-based clinical psychologist specializing in money psychology, says she sees nothing wrong in wanting to share the wealth with grown children—especially if a family can afford it and it’s done with “a spirit of loving generosity.” But she also notes that when it comes to parents and their grown children, money has many meanings to it. “You can give money in a generous way and it’s about support, love and generosity,” she says. “But it can also be about control or about creating dependence.”
When parents are invested in giving their children money, Nusbaum continues, “they will expect something back and want to control the decisions of their adult children. They may give money for one purpose and the children may spend their money in a different way, and then the parent feels resentment.”
So, when is it time to snip the financial strings?
For Nusbaum, a good test for parents is to ask themselves whether the financial support is something that will lead to their child’s independence. By way of example, she says a child who hasn’t been able to get a job might ask for money to go to graduate school, hoping it will lead to better job opportunities. “That might be a worthwhile,if it will allow that young adult to become independent,” she says. But if the parent is supporting a child and there is no movement in terms of finding a job or career, it might be time to tell the child “I can’t do this for you anymore.”