As a parent, you want your children to gradually develop a sense of independence – and one of the main areas of life in which they can gain this is their finances. The problem is that you want to support them without them becoming overly reliant on hand-outs from you. This is an area which you need to handle delicately, as nothing can end up putting a strain on relationships quite like issues with money.
So, when it comes to issues like this, there are a few mistakes which you will want to avoid where possible – and here are some of them.
Setting Up a Cycle of Dependency
If you find yourself in a cycle of dependency which involves constantly giving money to your kids, this is not going to be beneficial for your bank balance or their sense of independence. Ultimately, if you can provide the financial tools and knowledge which they need to manage money better, this can end up being more effective than just giving cash whenever the next issue arises.
Withdrawing Support Too Soon
On the flip side to the point above, you don’t have to remove all levels of financial support straight away. Perhaps your child is ready to make a major purchase like a house, and you want to provide them with a loan for the deposit. But before doing something like this, you should make sure that the terms are clearly set out and everyone is on the same page. Otherwise, this can end up leading to disputes further down the line.
Not Managing Your Own Finances Well Enough
If you don’t manage your own finances well enough, you are never going to be able to provide support for your children as well. There are many resources available online which can help you out when it comes to better money management. Otherwise, you could get in touch with a professional financial guru to help you set up your finances better.
If you need help with your inheritance tax situation, take a look at Afhwm.co.uk. It is better to get things right now rather than leaving the situation to get worse.
Not Knowing Your Child’s Money Habits
Each one of your children will have a different attitude when it comes to their personal finances. So, when you are making your decision about lending money and how much to give, you should think back to any previous loans which you have given or any other money habits which you have seen them display. Again, this all comes back to not wanting to set up a cycle of dependence which is going to be beneficial to no one in the long-run.
Avoiding these money mistakes for your adult children is something which is worth striving for, as you don’t want to create a toxic relationship that involves finances. Ultimately, you need to strike a balance between providing support and not creating dependence.