In an ideal world, you would provide the best academic and financial education to your children and they would turn out to be responsible and self-sufficient adults. However, not all children grow up to be financially prudent or manage their money well. If they land in a financial problem and turn to you for help, it becomes very difficult to refuse for most parents. In the process, a lot of them end up losing money and upsetting their own financial journey or retirement. In what way can adult children become a financial liability and should the parents refuse or assist them?
1. He has taken many loans; wants your help with EMIs
As with many millennials, your child could be a loan junkie and buy everything, from home and car to appliances and furnishings, on loans. If he does not take his income into consideration and ends up struggling to pay the EMIs every month, it is likely that he will turn to you for help frequently. In such situations, it is best to refuse completely. If you keep offering money, he will never stop taking loans and eventually land in a debt trap. It may be a good idea to suggest the help of a financial adviser, who can not only point out the dangers of a debt trap but also the child’s inability to meet his financial goals.
2. He wants a loan from you for his startup
It is possible that the child has been doing well in his job for a long time and has decided to launch his own startup. If he has seldom asked for money in the past and now wants your help for his new venture, you could provide it if it does not impact your own finances. You could offer a loan without any interest provided the child returns it in a defined time frame. If, however, the loan jeopardises your retirement, you can refuse.
3. He spends a lot or gambles; wants frequent handouts
Any kind of addiction or extravagant spending is bound to create a financial blackhole and if you provide assistance to your child, you will not only make this blackhole bigger, but also end up losing your hard-earned money. While it is best in such cases to refuse financial help, you could assist the child in seeking behavioural counselling or therapy, and even bear the financial burden for the same if it does not upset your finances.
4. He wants you to bear his wedding expenses
If the child is well educated and has a good career, it is not necessary for you to fi nance his wedding, especially if you are not prepared for your retirement yet. You can clarify early on that you will not be able to bear the fi nancial burden of the wedding and the child can save for the same himself. If you have the means and are keen to spend for the child’s wedding, do so by all means, but do not feel pressured into doing anything you are unable to.
5. He wants to sell your house to settle his debts
If you have a self-acquired house, and your child is emotionally blackmailing you or forcing you to sell it so he can settle his debts or take care of any other financial liability, do not succumb to the pressure. You have every right to refuse help and are not bound by any obligation to sell it. You will not be able to take a loan for another house close to retirement. If the child stays with you, you also have the legal right to evict him from your house and not support him financially.
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All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write in to us at etwealth@timesgroup.com with ‘Wealth Whines’ as the subject.
Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.
