Finding a Balance in Helping Our Children Financially

We all want to see our children succeed, but how or how much we help them can be a challenge. Striking the right balance between support and independence is crucial, as very few valuable life lessons are learned without some form of struggle. Ensuring that our children have the opportunity to grow through their experiences is essential for their development into resilient and capable adults.

One of the best investments we can make in our children’s future is their education. Providing a good education is like giving them gold—it equips them with the knowledge and skills necessary to navigate the complexities of life and the job market. However, financial assistance without terms and conditions can backfire, leading to dependency or a lack of appreciation for the value of money. It’s important to be kind but firm, setting clear expectations and boundaries around financial support.

Accepting that what is important to us may not be as important to our children is another vital aspect. Each generation has its own priorities and values, and understanding this can prevent conflicts and miscommunications. Sharing experiences, such as travel, can be a wonderful way to teach values and expose children to the bigger world out there. These experiences can impart lessons on different cultures, economies, and the importance of empathy and adaptability.

When loaning funds, consider formal loan agreements. This not only protects the financial interests of both parties but also provides clarity and structure to the arrangement. In the unfortunate event of a child’s relationship or marriage not working out, such agreements can safeguard the loaned amount from becoming entangled in legal disputes.

Lastly, it’s crucial to remember that your hard-earned money should look after you first. Ensuring your own financial security and well-being allows you to help your children from a position of strength rather than sacrifice. It’s not selfish to prioritize your needs; in fact, it’s a responsible approach that ultimately benefits everyone involved.

In the end, helping our children financially is a delicate balancing act. By providing education, setting clear terms for assistance, sharing enriching experiences, and safeguarding our own financial security, we can support our children’s success while fostering their independence and resilience.

Dirk Groeneveld, Certified Financial Planner.