My clients, “Mr. and Mrs. Generous” and “Mr. and Mrs. Enablers,” both wanted to help their children. As their financial advisor, I told one couple that it was fine to help their daughter on a regular basis. But I advised the other couple to stop helping their son as they were enabling him to continue with bad financial habits. Here’s why:
Helping vs. Enabling
While most parents want to help their children, there’s a difference between training them to become independent adults versus giving them a monthly allowance even when they are married with children.
Mr. and Mrs. Generous told me their daughter was trying very hard to hold down a job and raise her children, despite having physical disabilities. Mr. and Mrs. Enabler, on the other hand, said their son was always trying to start new businesses, failing, and asking them to invest more in his failing business and for more money to pay his personal bills. I explained that he saw the gifts as a ticket to not working responsibly. Some parents recognize that their children need to be cut off financially. Others, however, cannot identify when to say, “We’re done supporting you.”
How an outsider can help
In the case of the Generous family, I assisted them with their financial plan so they could better plan how to help their daughter. Once they saw that they’d have enough money for their own retirement and to give ongoing help to their daughter, they breathed a sigh of relief. Helping the Enablers, though, required a few more meetings because it was emotionally difficult for them to stop giving to their son. Eventually, though, they told their son it was time for him to fully provide for himself, and amazingly, he began to do just that. He started succeeding once the money stopped flowing to him.
If you're concerned about either being too generous or being an enabler, send me an email at: doug@Profile-Financial.com
Douglas Goldstein, CFP®, investment advisor is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published June 4, 2018.