When you were young, you started with nothing. But you have worked hard all your life. Now things are different. You can afford things you never thought would be possible. You are doing well. You want the same for your kids and grandkids. You love them. You do not like to see them struggle or have a difficult time with life.
Because of their situation, you really want to help them out, and you do. Your parenting instincts kick in, so you give them the cash they need. You bail them out, again and again. But is it actually helping?
I call these kids the dippers because they are always dipping into the family financial bucket. The dippers usually have or could have decent jobs, but they never seem to have enough money. They seem to be always complaining about and have excuses for their lack of financial resources or their financial plight.
Oftentimes with dippers, it is not the lack of money that is the issue, it is just how their money is spent. These kids never seem to have trouble finding the cash for the trip to Europe, the hot tub or house addition. But when it comes time to pay the mortgage or medical bills or send their kids to college, they seem to repeatedly come up short.
You may try to justify these gifts to dippers because they do not always ask for cash. Although they do not always ask you for money, they really did. They are much more manipulative and take advantage of your good nature. They know that if you see any of your loved ones in trouble, you will want to help out. So they just make sure that you see them in financial trouble.
And these kids by example teach the grandkids that being a dipper is the proper and right thing to do. And then you start helping out the grandkids. When you are “helping” out the kids and grandkids, you are reinforcing the behavior that it is OK to be financially irresponsible because you will always be there to bail them out.
Have you really helped your children or grandchildren by supporting them long after they have reached adulthood or have you ruined them? What is going to happen with or to them when you are no longer around to support them and repeatedly bail them out? They cannot support themselves. You have enabled that situation by supporting them when they could and should be supporting themselves.
When you support these able-bodied dippers indefinitely, you are enabling them to be dependent. When they are dependent, they will not be self-sufficient. If they are not self-sufficient, what is going to happen when you are no longer around to support them? They typically will either seek someone else off of whom they could sponge, or they could just crash and burn and be worse off than if you never “helped” them at all.
How do you stop this enabling cycle and cut the cash cord? It’s not going to be easy and the dippers will try to guilt you into continuing supporting them. I believe that it’s our job as parents to raise our kids to be independent and self-sufficient. You have to have a Tough Love plan of no bail outs.
And you have to follow through with the plan. It may be difficult for you and for the kids initially, but it will force them start making responsible financial choices and stop relying upon you for support. You will no longer be ruining them. You will be giving them the opportunity to be self-sufficient. And isn’t that your job as a parent anyway?
By: Matthew M. Wallace, CPA, JD
Published edited May-June, 2015 in Savvy magazine as: Are you helping or ruining your children and grandchildren?