"Parenting has changed to obsessive paternalism over time. Well-meaning parents are taking over the financial lives of young adults....The adult child needs to be weaned away. Lines need to be drawn."
This sad state of affairs and the heartfelt advice that accompanies it comes not from the mouth of a financial advisor or self-help columnist here in the U.S. I came across this paean to the fostering of the financial independence of adult children in The Economic Times of India.
Uma Shashikant was exhorting her readers to save for retirement and reminding them that the greatest hindrance to building a nest egg is a soft-spot for indulging adult children financially, particularly children who have jobs and are earning money. She goes on to describe three forms this indulgence takes: a subsistence allowance, a cushioning allowance and a brat allowance.
India is not so far removed from us that the three categories don't apply here. In the spirit of sharing ideas from other cultures, here are Uma's descriptions of the ways in which Indian parents rationalize their financial support of adult children and the ramifications of doing so.
The subsistence allowance: We would call this the return to the empty nest. Parents provide a place to live, food to eat and a means of getting around. While Shashikant admits that this form of assistance can help a young, working adult build assets, she also notes that "these sheltered young adults will not know how to manage within their own incomes. ...Persistence of this subsidy can lead to a situation where young adults see even core expenses as burdens."
The cushioning allowance: Parents pay insurance premiums, fund their children's share of holiday and celebration expenses and chip in for or take on large expenses. "When the financial status of well-placed parents is better than that of the young adults, these expenses are either willing subsidies or a result of emotional blackmail," Shashikant writes. "Parents effectively bear the decisions made by young adults, dangerously separating action and consequence. Not an advisable practice."
The brat allowance. If subsistence and cushioning are bad ideas, the brat is worse. This is when parents pay off their child's debts (loans, credit card bills) and, in Shashikant's words, "also fund the adult children's demands for upgrading to better cars, gadgets and homes." If their adult child's income is not up to their lifestyle, the brat allowance provides cash to meet life style expenses. We don't need Shashikant to point out the flaws here, though she sums them up this way: "The brat allowance clearly encourages the young adult to live beyond their means, assuming that the parents' assets are theirs to access and use as they wish."
Reading this piece reminds me how universal are the issues of parents, money and adult children. For Shashikant (and for most of us) there's an unpleasantness about a defined allowance--certainly of a brat allowance and its sense of entitlement. Where to draw the line? Here's Shashikant's advice: "When help comes without asking, the sense of entitlement increases. Parents should wait for the children to seek, ask, request financial accommodation, before jumping in to bail them out."
My take-away: An occasional helping hand, yes. Open-ended allowance, never.