One of the many challenges parents face when raising children is the task of teaching them how to manage their money responsibly.
Kids can begin learning about financial literacy during their high school years. One good resource is the Federal Deposit Insurance Corporation’s (FDIC) Money Smart for Young Adults instructor-led curriculum.
As they grow into adulthood, some are able to adapt to a lifestyle that involves working, earning an income, and being financially self-sufficient.
Others encounter difficulty with achieving a sense of financial responsibility. When this happens, parents often confront an emotional choice regarding how much to help them out and how much to encourage them to solve money problems on their own.
Bestselling personal finance author and radio host Dave Ramsey recently received a question from a woman seeking advice on how to handle such a situation in her own life.
“Our daughter is 27, and she’s been married for three years,” the woman, identifying herself as Danielle, wrote in email forwarded to TheStreet from Ramsey Solutions. “We’ve been helping her and her husband financially quite often the whole time they’ve been married, and we’re afraid this isn’t going to end anytime soon.”
“They both have decent jobs, and we don’t have any idea where their money goes,” she continued. “Lately, they have even tried to guilt us into giving them money by saying they’re afraid if we don’t help them that our granddaughter might have to go without things. We’re not sure how to stop this behavior. Do you have any ideas?”
Dave Ramsey offers blunt advice on adult children and money
Ramsey acknowledged that situations such as these are tough, largely because it’s difficult to worry about a grandchild lacking the resources for a proper upbringing.
“But let’s get real here,” he replied. “It’s way past time your daughter, and your son-in-law, learned how to manage money like responsible adults. I don’t know how much you two tried to teach her about finances when she was growing up, but it sure sounds to me like this ‘needing help’ is turning into an endless cycle.”
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“You’re giving them money left and right, and it’s pretty obvious it’s not working,” Ramsey added. “You’re giving them fish. I’m sure you’ve heard that old saying, right? Let’s flip the script. You could teach them to fish, and that would mean not giving them anymore fish. Honestly? I think there’s a better way.”
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Dave Ramsey suggests solution for adult children with money problems
Ramsey suggested that one possible approach to solving the problem is for the parents to base further financial assistance on the condition that the young couple goes to financial counseling and demonstrates strides toward straightening up their financial lives.
“What if you give them fish only if they take fishing lessons?” he asked.
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Ramsey added another thought that involved a tough-love strategy.
“They’ve figured out if they manipulate your feelings, you’re going to cut them a check. They’re playing you right now,” he wrote. “So, if they try that again, maybe by saying they’re afraid your granddaughter might go to bed without dinner, tell them to send her over to your place for a good, homecooked meal. If they complain about running out of money before payday, tell them to go to their financial counseling sessions to learn how to fix the issue.”
Ramsey recommends a financial matching plan
Ramsey surmised that as he understands it, every time Danielle’s daughter and husband have a money problem, they think the solution is to ask Mom and Dad for help.
He explained how setting up a savings matching plan might help:
They don’t really have a problem as long as you folks keep doing what you’re doing. Love them well, and be kind, but serious. Let them know you’re not going to give them any more money unless they go to financial counseling sessions together — regularly. Tell them if they’ll do this, and turn in a budget to you, so you and your husband can help coach them on how to be adults and handle their money better, that you’ll set up a matching system for any money they save.
Of course, a matching plan wouldn’t be a permanent thing. But if you gently and firmly lead them toward a different way of thinking and behaving with money, and provide encouragement and a little positive reinforcement now and then, you might just begin to see things change before long.
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