You’ve probably heard the Chinese proverb, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” We can paraphrase and apply this proverb to families and finances: “Give your children money, and you meet their needs for a day; teach them to be financially responsible, and you have given them the tools to meet their needs for a lifetime.”
A nationwide Pew Research Center survey released in 2013 showed that roughly half (48%) of adults ages 40 to 59 have provided some financial support to at least one grown child in the past year, with 27% providing the primary support. These shares are up significantly from 2005.1
Financial support for adult children was most often for living costs, transportation, and even spending money. The reasons for giving were varied from outright concern for their child’s well-being to simply not wanting them to struggle financially like they, the parents, once had. When it comes to parenting, the message we often give or get is, “more is more and less is less.” But could this protective instinct backfire? Perhaps the question should be: “Will this financial support empower or enable my children?”
It is likely that financially supporting adult children is not factored into the parents’ financial plan. Before you come to the financial rescue of your adult children, or set expectations for generosity that cannot be guaranteed, ask yourself: Can I really afford this? This is a very relevant question to ask and essential to good financial planning for the long-term. And if you involve your children in your thought process, this self-assessment will prove more valuable to them than the check you write.
The Women’s Roundtable at Bell Investment Advisors welcomes you to join a diverse and dynamic mixture of friends, family, colleagues, staff, clients, and professional women interested in learning more about how to build a financially-sound future.
Our next gathering, “Saving for Retirement: Never Too Early, Never Too Late” will be on Wednesday, June 25, 6–7:30 pm in our Oakland, CA office. Join us for wine and cheese, networking, and talk on an important topic. Reservations for you and a guest are required. To RSVP or for more information, contact Jaye Roundtree at 510.433.1066, ext. 100 or jroundtree@bellinvest.com.
1This survey was conducted November 28 – December 5, 2012 among 2,511 adults nationwide.