How Much Is Enough: Our Financial Obligations to Our Children

When it comes to money, how much and how long? What are a parent's financial obligation to their children, as they leave home, enter adulthood and beyond.


Recently, someone introduced me to the book, “How to be Happily Retired:  Working on Spending Your Children’s Inheritance” by Eudora Seyfer and Dr. Denis Waitley.  The title of the book got me to thinking.  What are our financial obligations to our children and how far do they go?

For example, if you have a limited amount of money do you spend it on your child’s college education or do you put the money away for your own retirement? One middle-aged father, who was willing to take money out of his IRA to finance his son’s college tuition told me, “I think as a parent that’s the thing I need to do, even at the expense of my own future.”  Another parent said, “In today’s world where a high school education is a dead end, parents do have a responsibility to help their children through college.”  The latimes.com would agree stating that individuals with a bachelor degree earn 84% more over a lifetime than high school graduates. Financial experts, however, have a different point of view as to how a parent should manage their money, when it comes to financing college.  Liz Weston, from MSN Money, recommends parents should never borrow from their retirement funds, cut back on their retirement savings or take on loans that would require them to delay retirement.

But what is a parent’s financial obligation after their child has an education and is launched?  Should a parent crimp on their own lifestyle to provide further financial assistance or an inheritance for their children?  One parent responded by saying, “As long as my children are doing well, I don’t feel any obligation to help them – I’d like to, but don’t feel any obligation.”  Another parent added, “Not in today’s world.  People are using up their money on living.”  Indeed, many older adults have concerns about outliving their money.  There are some parents, however, who may feel guilty spending their money on themselves, a hangover from all those years of caretaking.  In addition, there are some adult children who may be selfish or feel entitled to their parent’s money.  With the demands of acquiring a home and raising a family, these children may feel they should be given a share of their parent’s money.  Indeed, an extreme example of this was found in an article many years ago in "The New York Times."  The article recounted how adult children would “grocery shop” in their parents’ homes, taking breakfast cereals, toilet paper and stocking up on whatever they might need for their own homes.

However, a truly adult child should gain satisfaction from watching their older parents be financially secure and enjoy their lives, with whatever money they might have, after a lifetime of working. My own father, referred to the latter part of his life as “the last round-up.”  Indeed, life doesn’t go on forever.

For more information, I can be reached at 203-539-1255 or drlaurel@drlschwartz.com.


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heavens sake October 07, 2012 at 06:32 PM
No easy answer on this topic, especially with today's declining middle class standard of living. Consider these dynamics in our economy; College loan bubble that has subsidised university growth at expense of straddling students with unsustainable debt exceeding total credit card debt for nation In turn tuitions have skyrocketed as well as building programs and teacher salaries Parents 20 years ago could afford college tuition but now can not. Therefore responsibility has shifted to students, government subsidies and bank loans While family wealth has helped some fortunate students, wealth creation in future will be curtailed due to economic stagnation, capital destruction, inflation, rising costs of elderly health care, and rising income disparity. At same time, parents are marrying and having children later in life so college tuition needs occur closer to retirement while parents go through productive years spending like crazy without saving for retirement or education. Obviusly something has to give, which no amount of clinical advice can resolve unless the advice is directed to our dumb polititians who are influenced only by big biz.
Cliff Cuming October 07, 2012 at 10:51 PM
And big labor, and the liberal media and the liberal education community.
Dr. Laurel Schwartz October 08, 2012 at 05:07 PM
Thank you both for pointing out other important things to think about.


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