On the Oprah Winfrey Show a while ago, Suze Orman was helping a family to discover what was most important to them. The discussion was around whether or not a particular set of parents should be funding their daughters’ post secondary education.
I remember it keenly because the father was extremely determined and he insisted that he and his wife fund their daughters’ education even though it would mean they would be emptying most if not all of their retirement savings in order to do so.
The mother, however, didn’t think this was a good idea. She had retirement goals and didn’t want to have to forfeit their retirement. It is not that she didn’t want to help her girls, but she also recognized their need for a retirement nest egg.
Suze had the whole family vote, and the daughters agreed with their mother that their parents were just not in the position to be able to fund their entire education. Suze made it very clear to the family that they simply could not afford to pay for the education themselves. She was very frank about it, but the father still didn’t seem to be convinced.
Let’s look at this situation a little bit closer. If the father insists on funding his daughter’s education, there are going to be some serious negative repercussions.
First of all, the daughters are going to be under a lot of pressure, as they know that their parents are making a huge sacrifice for them. They may also end up feeling responsible for increased tensions between their parents due to their disagreement.
Secondly, there is going to be major tension between the mother and father and the mother could easily become resentful towards her husband and possibly towards her daughters as well.
Thirdly, because mom and dad spend so much money on their kids, they could easily end up being a burden on their daughters down the road, as they simply won’t have the means to fund their own retirement. So, although they may be helping their kids out in the present, they would be creating a whole lot of emotional, not to mention financial stresses on their kids later on.
In my opinion, the best thing you can do for your kids is teach them how to be responsible with money through your own actions, make sure to save enough to provide for your needs in retirement, and help your kids out financially within your means. This way you have thoroughly equipped your children to be responsible money managers who will never have to depend on you financially in their adulthood.
There’s nothing wrong with wanting to help out your kids, just make sure that you are doing so within your means and that you are not forfeiting other important financial goals such as your own retirement. Your kids will understand and will appreciate your responsible attitude towards money.
3 Comments