I haven’t whined about my parents in a long time. I think my high school buddy remembers me complaining that my curfew was set when it would turn dark outside. Since then I’ve had a great relationship with my parents. My mom and I are besties, I like running ideas by her and she gives me good feedback.
My pops is a very kind and simple guy – zen all the way. I have a hard time connecting with him because I’ve always had a bit of a chip on my shoulder, like I need to prove something, get somewhere else, or do something else.
This post is about financially selfish parents. Adults who marry and pop out kids and think that everything will be fine as long as you sprinkle in a little love and attention, maybe the occasional guidance. I’ll add a little twist though just because I’m clever like that.
Giving Your Kids Money
I grew up with everything I ever wanted. My parents spent on me like they would on themselves – if something was highly desired and sensible then why not.
But I wasn’t taught much about saving money, investing it, or earnings and so I developed an unhealthy relationship with money.
I learned hard work from both my parents which eventually saved my financial tail. Mom was a beast. Business savvy when it came to running her family daycare business. Dad worked harder than anyone half his age but like myself, he was more about brawn than brain.
This post isn’t about parents who are too cheap to give but parents who don’t set the right financial pace and raise kids who become financially weak.
It’s not what our parents say but what they do. And what they do will affect their financial outcome in the future. Which in turn means having to rely on their kids financially way too early because of their poor financial decisions.
So it’s often a problem of being too generous without backing it up with some financial education instead of parents being greedy with their money.
Financially Selfish Kids
I’ve always been a bit of a selfish person, I’m okay with it and my friends have come to accept me, fortunately. It’s something I’m working on.
However, as someone who has been very fortunate in life I believe in helping my parents out financially. The tough part is when you have to do that early on in your life – during a time when you’re still figuring all the financial shit out.
The times when grown kids are building their portfolio, paying back debt, trying to enjoy their time with their friends and family, getting divorced, or dealing with career drama isn’t the time to be worrying about your parents.
Unexpected financial disasters aside, parents have a huge responsibility to teach their kids how to be financially secure. Much more so when it comes to our daughters who are already heavily discriminated against in the US culture.
Career Over Money
Teaching your kids that education and a good career is their path to salvation is like me thinking that a stripper is gonna go home with me after I blow all those dollar bills on her – never happens, am I right? Right?
Both education and careers have a bit of uncertainty built into them which parents may downplay with good intentions. You can burn out of your career, you can get fired, you can get disabled, you can suffer an addiction, or a mental or medical illness.
You might pursue an engineering or medical career and realize that it you’d rather play with a box of cacti rather than listen to another boring biochem lecture. What then?
The path to money – whether you think it’s inherently evil or simply a tool – isn’t through a career nor through education. Money is traded for all sorts of services and goods and we as physicians have simply chosen one of the more secure paths towards a steady paycheck.
If I teach my daughter that her path to financial security is through a job then her job will have dominion over her – so will the education process which transported her there.
If I teach my daughter that money is ubiquitous and that anyone to whom you provide a worthwhile service to will willingly part with it then I have taught her to fish.
Financially Stable Parents
Back to parents, I’m not done ripping on parents yet. I think parents have a responsibility to teach their kids how to be financially savvy from multiple angles.
Fortunately, all that’s needed is for the parents to develop financially competence themselves. If my parents would have been more selfish (frugal?) they would have achieved this just fine. Whether I learned these skills from them is then up to me.
The skills needed which can help lead to financial security are:
- developing social skills
- money investing basics
- sales techniques
- risk control
The expensive tennis lessons which cost my parents thousands of dollars could have been replaced by sending me with some flat balls to go hit against the wall or find a friend to hit for free.
The music lessons could have been replaced with a used guitar and a how-to book from the library.
Wanna play an expensive sport like polo or sailing? Sure, wait til you’re older. And don’t give me the Tiger Woods story – please. How many kids have achieved even semi-pro level athletic capabilities because their mommy enrolled them in a sport at a young age?
However, if your kid can display some decent competence and more than average progress over a 1-year period of playing a sport on the cheap then it would make sense to shell out a little more. After that they are either so good that a coach will take them on for a much lower cost or they can teach other kids on the side in order to make the money for further coaching.
Here is a more detailed list of things parents could do regarding finances, in descending order.
1. Save Money
Parent(s) need to spend less than they earn in order to save money. Pretty simple. Don’t buy the nicer car, don’t get the nicer clothes, and buy stuff used if you have to.
The ability to save is #1 on my list because even if your other skills are lacking, as long as you can save then you have established a safety net for yourself.
No parent will have to prematurely depend on their grown kids if they have a healthy savings account. And if your children saw you save and learned your how-to’s then they can’t even tell you that you didn’t teach them anything about money.
You must know how to budget if you want to save money. You could be earning $10/hour and you can save a portion of that or spend all of it on your lunch at work.
If you are a ruthless saver without understanding the value of money then you are a saver and that’s perhaps the surest way of either losing out on a lot of future earnings or never being able to enjoy your money.
2. Invest The Money
The medical professional reading personal finance blogs is given advice to spend less, save, invest in index fund xyz, and get the right insurance product.
This is the best advice to give to sell advertising on your blog but that won’t make your chicken lay an egg.
Investing money requires practice, insight, and one needs to try a bunch of different things before finding the right option which uniquely fits them.
Most parents should have a financial adviser.
Most parents should have a great CPA and they should have a tax consultant in order to maximize the money that stays in their pocket – maximizing the amount of money available for investing.
They should involve the kids in the entire process. At what age? The sooner the better – 8 seems to be a great time to start the more structured processes.
3. Pay off Debt
In order to not have to depend on your kids in the future, parents need to be debt free. Not all debt is bad – yes, we’ve all heard that before. If your debt is on something that’s earning you money, by all means, keep it if you like.
I define financial progress as an increase in net worth from year to year. If you maintain this pace as a parent year after year then the only thing that can happen is that you become wealthy and perpetually more financially savvy.
4. Lower Your Baseline Spending
As parents you might have fancy taste or have expensive hobbies. You might want to live in a high-cost-of-living city such as Manhattan or SF or SD.
There is nothing wrong with that as long as you can budget towards your goals. Goal-based investing is exactly such a concept – we figure out what our financial goals are and design a plan working backwards to meet that goal.
Either you can sit down with your financial adviser to come up with this plan and have someone else (perhaps your partner or kids) help keep you on track or you can learn it all yourself.
5. Have a Will in Place
Should you fall into a coma or get squished by a falling anvil from the sky, what decisions should your kids make? What can you do to decrease the pressure on them?
It would be irresponsible in this modern society to leave things up to chance because it will divide your family. Having a will should drastically decrease these headaches.
6. Learn Income-Earning Skills
Earning a stable income in medicine isn’t easy – you have to make it through medical school, avoid letting the pressure of the work get to you, deal with angry patients, lawsuits, medical board investigations, have a poker face when dealing with a death of a loved one or a divorce.
But earning a stable income in medicine is such a specialized skill that it’s hard to translate it into other fields. Financially selfish parents may push their kids into medicine not realizing that they are shackling their kids prematurely.
If you can diversify your income then you can enjoy much more stability in this volatile economy. It could be sales, marketing, services, coaching, teaching, or leadership – all these are ways one can earn an income and I think it’s important for you as a parent to develop these not only to avoid having to depend on your kids some day but also to teach these skills to your kids.
Financially Selfish Parents
To summarize my point , financially selfish parents aren’t the ones who aren’t willing to give their kids any money. They instead spend and live lives which could one day create a burden on their children.
It’s not easy to say no to kids. But it’s incredibly powerful to help your kids understand the value of money. Everything from earning it to investing it without dehumanizing the process – without making them cold-hearted or ruthless money machines.
The financially selfish parent gives and gives, spends and spends, and chalks it up to love. But they then find themselves in a situation where they become dependent on their adult children or make their kids suffer because of irresponsible financial behaviors.
You can take a lot of pressure off of your shoulders as a parent by teaching your kids the above skills. If you know that your child will always have these basic money-making skills then you’re far less likely to worry which career path they choose – it doesn’t have to be hard to avoid being financially selfish parents.
In fact, when money is the least of their concerns then they are more likely to pursue something sustainable – it’s human nature, our survival instinct, to be sustainable.
Recognizing Red Flags
If you are a parent and don’t have the best relationship with your partner then that’s a red flag. A divorce is incredibly expensive and not just socially disruptive. Financially selfish parents doubly add to this problem not just for themselves but also their kids.
Another red flag is if you have very little family support or have moved or will move a lot. Moving and losing extended family and friend support will deplete your social capital.
Some families are torn apart by generations of mental illness and it’s hard to tell who and when a child might suffer of the same. It doesn’t have to be anything as aggressive as schizophrenia – it can be major depression or personality disorders.
I decided to through the ‘free-spirited’ kid in there. I find that some individuals are born with a resilience gene and can put their head down, bury their emotions, and work regardless of external pressures. Other kids are more free spirited and experience a lot of emotions – kids we call sensitive even though they are simply more in tune with others.
Such kids can go on to be amazing human beings who will provide the wold with really beautiful things. I think it’s worthwhile to help them build the necessary skills to become the frequency holders of the future by making sure that we become financially selfish parents.
We don’t know what our kids are capable of and if we corner them with our visinos then we will stifle their potential. Why not help them avoid the minion mentality and give them the skills rather than the map towards their ideal life.