What is any parent’s goal in raising their child? Ideally, you want them to grow up with a strong sense of values, to be kind and caring, to be responsible, to be capable of both giving and receiving love, to be curious, to be capable of wonder and appreciative of beauty, to be independent and free thinking. A big part of being independent involves preparing your children to become free of your financial support, and to be able to function autonomously in our society. This essay is about achieving financial independence, and the barriers that stand in its way..
Being an immigrant to America at a young age, I had various paying jobs since I was fourteen. I was taught early on to save a part of my money for future needs, and not to rely on credit except when absolutely necessary, such as in the purchase of a house. Of necessity, my education was funded through scholarships, as well as low cost government loans when I went to medical school. My parents contributed what they could for my meals and living expenses. I was grateful for what they gave me, and never expected more. I looked forward to the time when I could be earning enough to provide for all my own needs without relying on any support from them. Most of the young people with whom I went to school had a similar desire to establish their independence.
Times have changed. Attitudes have changed even more. Discussions around the family table regarding topics such as the purpose and value of money has become increasingly rare, in no small part due to the decrease in the frequency of family meals, where everyone is together at the same time has diminished, being relegated only to major holidays.
In our current time, it’s not unusual to find people in their twenties or even thirties relying on parental support to pay for personal expenses, even if they no longer live under the same roof, even if they have jobs that pay them a salary. Parents, especially those who are relatively well off, have a difficult time weaning their children off the family payroll. Perhaps they feel guilty for having worked long hours amassing their own wealth that they didn’t spend enough time with their kids, or they see their peers behaving the same way with their children, or they never bothered to set up the expectations in their own children as to when they need to make their own way in the world. Whatever the reason, I see a number of people whose children continue to rely on them for financial support way beyond the late teens or early twenties, which was the norm back in the sixties.
Certainly, schools have become much more expensive, and it’s not unusual to find students graduating with six figure loans the size of a house mortgage. This becomes especially difficult when no one explained to them that a major in English or Art History is unlikely to result in a job that will pay sufficiently well to pay off large loans as well as provide for the basics of food and rent. (This is not to suggest that these subjects are not important or worthwhile goals; only that taking out massive loans should be weighed against the reality of the pay afforded by various majors in the marketplace.) Career counseling needs to be an important job of both parents as well as schools.
Next comes the disconnect which our society has established between the ease of spending money and the ease of earning it. Paying for a purchase with a credit card or your phone takes but a second. Studies have repeatedly shown that people spend more in a store when they pay with credit than when they pay with cash. There is a great deal lost when you never had to perform hard labor to earn a dollar, and therefore fail to appreciate and properly value the money you have. You forget your jacket in the park playing with your friends. No worries – the folks will buy you a new one. And when the time comes to move out, you expect to maintain the life style you had when living at home, not knowing or appreciating that you parents worked for a long time and didn’t achieve their current standard of living until you were quite older. You expect that the Bank of Mom or Dad will be there to continue to pay your car insurance, your Netflix use, cellphone (after all, you are a on a family plan), or perhaps even your credit card with all those Starbucks charges.
There is no question that for those who are finishing school now, the job market is dismal, and millions are suffering economic hardships. In times of crisis, it’s normal and appropriate for families to help each other when they can. The problem comes when parents don’t train their children for the reality that the world has always been a difficult place, and give them the tools to deal with the hardships when they occur. Not teaching them the value of money and savings, along with the benefits and rewards of hard work is a failure in their parental duties. Parents need to set a good example to their children in avoiding impulse buying, setting and following a budget, and above all, using debit instead of credit cards for all but the most major of emergencies, then paying off the debt as quickly as possible. Too many American families live mired in debt, paying usurious rates to finance companies.
Children should be given chores with the expectation that they perform them well. They should receive an allowance, not as a payment for chores, which is their contribution to being part of the family. (I confess – I didn’t do a good job of this with my own.) They should receive an allowance to teach them how to handle and value money. Financial literacy should be as important part of a child’s education as writing, reading and arithmetic. As the children grow older, parents should make clear in advance at what point in time financial support will gradually phase out to allow appropriate planning for the future. Shielding your kids from the consequences of their actions, not allowing them to fail, results in pathologic dependency destructive to children.
Parents want to do their very best for their offspring. That is only normal. Depriving them of the satisfaction of earning their own way by providing for their every financial need destroys their motivation to achieve of all that they are capable, and prevents them from maturing into adults who will be properly able to raise their own children.