Ask Paul: My wife won't stop giving our adult kids handouts

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Dear Paul,

My wife and I are disagreeing over money lately.

We're in our 50s, with adult children, and several years ago my wife opted to give up her full-time job to pursue a small business.

ask paul clitheroe my wife won't stop giving our adult children money

Unfortunately it's really more of a hobby, and it costs more than it brings in, but it makes my wife happy and if we live carefully then we can manage without the second income.

But our adult children are always asking my wife for money.

They work but they seem to prefer to spend their own money on holidays and eating out, then approach my wife when there are bills to be paid.

She doesn't like saying no, whereas I think they need to learn to budget better. We have a mortgage on our home, and with rising interest rates and bills, I'm worried about our future retirement. - Bryan

This is quite a dilemma, Bryan, so I should not chuckle, but we clearly live in the same universe.

Some years ago I was really keen to give our youngest daughter solid money skills and teach her how to live to a budget.

So we sat down and worked out her spending plan for her last year at school. It was not a big amount, so we gave it to her in advance. Along comes the end of year and I ask how she went. She proudly told me she had "saved all of it". This was a complete mystery to me until, much to my amusement, I discovered that my wife, Vicki, had "helped her out" with expenses during the year. Oh well.

But this is about you being financially independent in retirement. This is a serious issue. What is needed here (I suggest rather nervously) is firstly a chat with your wife about the fact that you are not assisting your kids with their money skills. In fact, you are being a negative influence. Rarely in life do we find a "money tree" and I suggest you find a way to trim it.

The critical issue is you are not providing essential care to kids, you say you are funding holidays by paying their bills.

What I would suggest as step two, is a chat with the adult kids about the critical need for you to increase your mortgage repayments not only for rising rates, but you need to get the house paid off ASAP. This means much less disposable income for you and your wife and you need the kids' help to do this.

This conversation is going to require great tact and delicacy. I am not encouraging a relationship crisis, which is a real possibility.

Giving to the kids makes your wife happy and I can already sense "Scrooge" accusations, unless you are really cautious in your approach. With a mortgage, though, I cannot see how any reasonable kids would not agree that you should get it paid off. After all, they will eventually inherit the home!

You have a right to a comfortable retirement and, to be quite frank, you are doing the kids no favours by acting as their "money tree".

Angels fear to tread in this very complex area of couples living together with different views on money. This may be too negative, but I have seen relationship splits over money issues like this. Walk gently.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
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Money magazine
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August 9, 2023 4.36pm

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Kenneth Ryan
August 9, 2023 4.48pm

Oh Yes Paul

I am afraid that too many of us simply give in to avoid conflict. {my wife and I included} The problem is are you avoiding conflict or creating a bigger disaster in years to come.? I think unfortunately at some time a hard stance needs to be considered and adopted. But not without a great deal off thought on how to approach it.

Shaun J
August 9, 2023 5.17pm

i wonder why i struggle and then i read storries like this and find out that everyone elses mum and dad are paying thier bills for them!

Jeff Hangdog
August 11, 2023 7.11pm

Get all parties to read at least a quick internet summary of the findings in The Millionaire Next Door (includes studies on intergenerational wealth habits) before any more handouts.

Helen Wieckhorst
August 12, 2023 1.41pm

No not everyone else's parents are paying their kids bills. I think kids need to be more respectful and appreciative of their parents and their financial situation. Unless it's an emergency or the money is repaid, working kids shouldn't be leaning on their parents.

Bo Bo
August 13, 2023 9.08pm

In the book 'The Millionaire Next Door' (Danko & Stanley) this is referred to as Economic Outpatient Care (EOC). The impact is the children do not develop good monetary habits - they spend rather than save.

Bobbie Pankiw
August 15, 2023 11.02pm

This worked well for my late spouse and me. My suggestion is - talk to your wife about the increasing cost of living and mortgage payments. Suggest that all bills and debts should be budgeted for and paid first e.g. debts, food, insurance, repairs, medical, transport, etc etc - through a "our living account". A total should be arrived at - with a percentage also being added for a rainy day. Any remaining "free" money should be divided equally between you and your wife - for each to use as they wish. If your wife chooses to donate to her business - or to your rather thoughtless kids or grandkids, that is her choice. You, in the meantime should use your share as you wish - savings, investments, hobbies etc. Neither party should pressure the other to alter their choices or plans. Any deductions from the living account should be after full discussion - and (if required) with joint signatures. P.S. Don't tell ANYONE what you have accrued.

Bobbie Pankiw
August 19, 2023 2.22pm

This should be done on a monthly or weekly basis. Make it a strong, required habit.