#6 Champagne Taste on a Beer Budget
An even bigger liability is a child who does not have any idea how to earn, save, budget, and spend wisely. Stanley and Danko documented the serious adverse effects of “economic outpatient care” in their classic book The Millionaire Next Door.
If your children leave your house with the idea that most Americans go to private school, drive Audis (or a Tesla), shop at Whole Foods, and vacation in Fiji, you have done them a massive disservice. Maybe they will earn enough to maintain the lifestyle they have gotten used to, but I would expect a large percentage of the children of my readers will earn less than their parents did on an inflation-adjusted basis.
#7 Parental Financial Insecurity
All of the above are terrible gifts to give your children. However, I saved the worst one for last. Most of the above problems are solvable—some pretty darn easily (sell the car, surrender the whole life policy, etc.). That’s not the case for this one.
I run into docs all the time who are flummoxed at how to take care of their parent who can’t control their spending, who has no assets, who just got scammed, who wants to move in with them, who requests money from them, or who basically is in such terrible financial shape that their child lies awake at night worrying about them.
One of the most wonderful gifts our parents have given us is their own financial security. They’re a blessing on our own financial lives instead of a drag. Many parents would do anything to help their children, but there is a reason you should prioritize retirement over saving for college.
Likewise, you should prioritize your own financial security at least equal to that of your children. Don’t put that burden on them, even if it is typical in your culture. It is far easier to lift someone from above than to push them from below. Assist your children from a position of strength.
What do you think? Are there any other terrible financial gifts that parents pass along to their kids? Comment below!
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