While a boomerang might not be on your Festive wish list, you may very well end up with one, at some point or another. We’re not talking about the toy version of the Australian indigenous weapon. We’re talking about a member of the Boomerang generation – a young adult who is still living with his or her parents.
Boomerangs may be here to stay, with rising costs of tertiary education and an increasingly competitive workplace becoming both a global and local reality. Yet it is how parents deal with money and communicate that to their children that can make the difference between good relationships and strained ones. It can also make or break their financial well-being.
Money Talks with Your Kids
We all want the best for our children, and many of us, especially those who have come from families where money was scarce, often feel compelled to provide more for our kids than what was provided for us. Whatever your financial profile, one of the most important things you can do is talk to your children about money, from an early age. This lays important groundwork for them about money and how to handle it responsibly, and opens the door to communication about a subject that binds parents and children throughout life. It is when money isn’t discussed that pressure, both financial and emotional, can mount.
Life has changed for the current generation. Ironically, whilst more independent on many levels, many often need a helping hand from parents for far longer than you may have growing up. There’s no doubt that education is more important than ever, although we believe that a troubling mindset is developing of educating at any cost, which may not always be the most prudent choice for your, the parent’s, career or pocket.
This is a good time to remember what they tell you during the safety demonstration before your flight takes off: always put the oxygen mask on first before you attend to your child’s, in the event of an emergency. While you want to make sure your kids are looked after financially even once they’re grown up, you need to make sure that you are financially fit first.
The best way to leave a legacy for your children is to make sure you take care of yourself first. This comes down to sound financial planning, which may not include digging deep into your retirement savings in order to fund your daughter’s third degree. We’re not saying you shouldn’t always be there for your children. We’re just saying that there needs to be some balance, and you deserve to have a comfortable happy life too. And at some point you may have to ask yourself a challenging question: What am I more afraid of — becoming financially dependent on my kids later on in life or not being able to help them reach their own dreams and aspirations?
The best way to deal with this issue is to talk about it: with your children and with your financial planner. So this 2015, why not make one of your New Year’s resolution to be more open with your children about money?