Money and Parents: Communication is Key

by TTMK on July 17, 2014 · 2 comments

money and parentsWhen it comes to money and parents, communication is often different than it might be in other circumstances.  Money can be a topic shrouded in secrecy, either on purpose or when individuals are  held back by feeling uncomfortable talking about the subject.  Sometimes, people just don’t communicate about important things in general, and financial discussions (or the lack thereof) are simply a byproduct of this dynamic.

Certainly, our finances our own business, when it comes down to it. People can and do share details with others, but it’s a personal choice to do so.  As a personal finance blogger, I obviously enjoy talking about money-related issues, but that doesn’t mean that such discussions are very detailed with my own parents in terms of their finances.  Clearly I’m not alone, and an interesting article in Smart Money  addressed the topic of things that parents don’t tell you about their finances.

There were 10 items listed regarding ways parents don’t share financial information, and I’ll share them (paraphrased) below along with my own comments on each.

  1. They’re rich.  That’s not the case with my parents, I’m 99% sure of it! Regardless, there are parents that do a good job of hiding their wealth from their kids. Now, I do like the idea of kids not operating under the idea that they will get parental help.  It’s best to be self-sufficient! The flipside is that some level of transparency is a good idea in life, right? Overall, I don’t think this is much of a transgression!
  2. You’re out of the will.  Yes, I can see how this is a tough one.  For a kid to be out of a will can be difficult to understand, but there are some people who want to give money to charitable or other causes.  Or, more pertinent to the discussion, they give to other kids instead.  Personally, I think that it’s tough to exclude one child, but I do think its fine to give a kid who is disadvantaged or has had hard luck more than another.  Do you agree or disagree?
  3. They are being taken advantage of.  They may not know it, or they may be too embarrassed to say. Either way, this is where some level of transparency can be helpful.  Additionally, a close relationship with parents helps too.  It’s good to help look after them in some way to protect them.
  4. They helped shape your bad financial habits.  For some reason, many parents tend to think that kids need to learn things all on their own through the school of hard knocks. Maybe they themselves didn’t get guidance at home, so they think that’s normal. Nonsense! It’s a parent’s job to prepare a kid for life, and this includes teaching the basics of personal finance responsibility.  That’s not to say that parents are responsible for all decisions made by their grown-up children, but they should actively work to give them a strong foundation.
  5. You’re hurting their retirement.  Many grown-up children seem to have a tendency to sponge off parents later in life, and some parents have trouble saying no.  I have seen this in practice.  Personally, while I might end up being one of those parents, I hope to be able to fight the impulses and just be strong and draw a line. Not just for my best interest of course, but for the kids’ well-being too. There’s something to be said for self-sufficiency.
  6. It might hurt your retirement.  Despite our best efforts to be self-sufficient, sometimes it doesn’t turn out that way for everyone.  It’s not just kids that need help, but sometimes its parents too.  Open communication between family members should be in place, to make sure people know the risks. And remember, how you treat your parents will strongly influence how your own kids treat you when you’re old!
  7. They have health problems.  Parents don’t like to burden children, at least most of the time. Or, they may want to hide problems.  However, left untreated or unaddressed, some of these problems can result in big health and financial issues later.
  8. They’re addicted to something.  This is sad. I actually heard secondhand about a story about a grandmother who supposedly gambled away a big part of a grandchild’s college savings.  It’s good to keep tabs on them and try to pay attention to observe such things.
  9. Take away the keys.  Pride and lack of awareness just might be keeping many older people from giving up driving. I recall, years ago, seeing a very old man walk very slowly to his car and have trouble using the key to get into the car. It was obvious that the days of driving were long past this guy, which is scary for others on the road.
  10. They love a sibling more than they do you.  I tie this topic to #2 above, about being out of the will.  To me, it’s not fair to show favoritism in this way or let it impact distributions of money.  Of course, life isn’t fair and we’re all human. As a parent, I think that it’s important to put feelings aside and be equal. That said, if one child truly needs more than another then hopefully they will both understand that getting extra money is based on that, and not favoritism.  As a kid, it’s best to remember that life isn’t fair and that we can’t control others.

To me, when I look at all of these things that parents may not tell you, there are two approaches to help facilitate good communication.

  1. Building a relationship.  Hopefully it’s more like keeping a relationship strong, but it’s important to maintain some level of closeness with parents to make sure that these things don’t happen.
  2. Transparency.  Many of us like to keep a comfortable distance, but some level of transparency can be very helpful long-term for both parents and grown children.

My Questions for You:

Do you agree/disagree with any of these, or my comments on them?

Have you seen any of these turn up, either in your family or with others?

What are your suggestions on how to handle such situations?

{ 2 comments… read them below or add one }

Michelle July 18, 2014 at 6:36 pm

I agree with most of these comments. I have not had experience with an unequal will, etc. I do have aging parents and have encouraged one set to go through paperwork, etc. so that when the time comes it will be easier to find accounts etc. The other in-law is in a nursing home no longer to communicate at all. We have had to go through tax returns from 1995, etc. It would have been so much easier if she had gone through them a few years ago while she was of sound mind.

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TTMK July 25, 2014 at 4:46 pm

Really good example, Michelle. Such situations can be tough all around, and it’s better for a variety of reasons to have discussions sooner than later. Life can change unexpectedly in short order.

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