You absolutely must teach kids about money. If not, you won’t need to worry about what to do with your savings because you won’t have any. Here is an e-mail I received. I wanted to share it with you and hear your reactions:
“I have a 62 year old friend called Isy. Two years ago he had a heart by-pass and retired early. Isy has been giving money regularly to his son since college (around $8k per year).
Despite his son graduating and being employed full-time, Isy has said he will pay his sons mortgage and other important bills if he is made redundant. He son does not ask where the money is coming from. However, Isy has told me that he will be cashing in his investments.
Isy told me he is now deeply concerned over his own financial future. He pension is enough to live off but he is now using up his reserve tank that would have otherwise be used to battle the effects of inflation. When I spoke to him on Thursday the worry was very clear in his voice. I am concerned over his health. His doctors has told him to avoid stress but the reality is his actions are actually giving him more stress.”
What was your first reaction when you read about Isy?
Were you about ready to get on a plane and kick his son’s butt? Did you feel bad for Isy? Me too. Then I read the email again.
I didn’t change my mind about Isy’s son. I still wanted to get on that plane. But I also got a bit agitated by Isy. Did you? After all, Isy’s been his son’s personal credit card since he was in college!
Isy has practically trained his son to be a slug. Right?
Clearly, Isy’s heart is in the right place. He just wants to help his son. But at the end of day, he and his son are both accomplices in the murder of Isy’s retirement. And if the stress continues to build, Isy may lose much more than his money.
I think we can all learn from Isy. Wait…amendment…we have to learn from Isy. As painful as it is, we have to let our children reap the consequences of their financial and life decisions.
I realize this is really easy for me to say. I don’t face the same pressure that Isy faces. Thank goodness none of my children face the problems Isy’s son faces. I don’t know how I’d react if I were in Isy’s place. How do you think you’d respond? Have you ever been in a similar situation?
So why bother talking about it?
Because if we set strong boundaries now, we can reduce our kids’ chances of becoming lazy slobs down the road.
There are many steps you and I can take, but I just want to talk about boundaries today. If your kids are young, this is going to be much easier for you. But if your kids are older, it’s still not too late.
1. Identify the problem.
Isy’s son’s problem was that he didn’t know how to take care of himself. But that’s not Isy’s problem. Isy’s problem is that he continues to spend down his own retirement with no end in sight. He’s not setting any boundaries with his son. Now let’s turn the tables.
Is somebody around you stepping over the line? Do you need to set new boundaries? Is someone’s spending or investing behavior causing you a nuclear-sized headache? Who is it and what are they doing?
2. Consider the alternatives.
Based on what we’ve read about Isy, we know he’s not going to kick his son to the curb – an immediate cash cutoff is not going to happen. But he could tell him that the cash support will taper off over the next 12 months. This gives Junior plenty of time to make plans and adjustments.
What do you have to do to protect yourself? Is your spouse spending out of control? Don’t wait for him to change…what are you going to do about it today? Can you take away his credit cards? Can you give him a certain amount of cash each week and cut off all other access to money? What are all the alternatives?
3. Make a decision and accept the consequences.
While the first two steps are relatively easy, this last step is what separates the Wealth Pilgrims from the wimps.
When you draw a line, you tick people off. They are used to wiping their feet on your account statements, and when you stop allowing them to do it, they don’t like it. Expect some blowback.
How do you think Isy’s son is going to like being told the ATM machine is no longer functioning? How is your spouse going to react when you take away his credit cards? Are you ready for it? Have you ever taken this kind of action in the past? How did it turn out?