You can see from your own life, that how struggling it was to build sufficient wealth, and how hard it was to become financially independent.
It’s definitely not easy to let go of your finances just like that!
Time is valuable! All the money you accumulated in your lifetime, is actually very precious.
But then, we have our kids and they are precious too.
So how to handle retirement, college, and wedding expectations when your kids want your money?
Let me remind you beforehand that it will be difficult to manage all of them at the same time.
First, see if your kid is worthy enough to take control of your finances:
This might sound harsh, but you need to be a bit cold-hearted at this part.
So notice your kid’s behavior and see if he’s capable to have authority over your finances. Remember the wealth that you have is the value of the hard work you have done, and your kid can never understand that.
If your kid is old enough to get a job, but he finds solace in fooling around with his buddies, partying and spending days absolutely doing nothing fruitful, then I believe he’s not worth your money.
But if your kid is responsible, has a good job, helps you a lot and takes care of you, then I believe you can share your wealth with him.
Still always remember one thing, that your savings is your last resort in the retirement days. But, your kids have the whole life lying ahead to build good wealth and get good jobs. While for you, all these options are closed.
Next, see if your kid’s demand is justified:
Just because your kid is smart, good, intelligent, responsible, and caring, it doesn’t mean you give them all the money they want, and all that you have.
Take time to understand for what do they need your money, and if it will be put to some good use.
If they want your cash to get married, make a down payment for a new house, get a new car, or for their university fees and expenses, then probably you should give a green signal.
But if your kids can’t come up with a good reason, then you should show a red sign and say you just can’t help it.
Also, you must look at the other aspect, that if they show the tendency to return back some portion of your money in time.
I know you won’t be taking that money back from him, as you believe what’s yours is theirs too!
But if they show such an interest, then you can be assured that they are responsible in handling big amounts, and they won’t ditch you in the future, if they really mean that they want to return your money.
Now see how much you can afford to give and from where should you drain out the money:
It’s not that you will give everything all you have. See how much you can afford to give, without making deep holes in your savings and emergency funds.
I would say not to break any certificate of deposits if you have them. Rather you can consider your Roth IRA, for coping up with your kid’s expenses.
But yes, it is always better to have a separate savings account for your kids, if you can afford.
Later, if the money is not required, then it’s yours to keep.
But ultimately, it’s completely up to you, what savings accounts you will break to help your kid cope up with those expenses.
Here are a few things for you to help your kids with their expenses without sacrificing your wealth:
- Make a different savings amount from now on, which will fulfil your child’s future expenses. Whenever required, you can pull money from that account without dissolving your other savings.
- You can also invest or contribute in a 529 savings plan, to cope up with your kid’s college expenses. Alongside you can keep on saving for retirement without your kid’s education costs hampering it.
- For a happy marriage ceremony of your kid, you can hit your personal savings, or keep aside a fixed amount each month to help you with funds later, when the time comes.
So ultimately the moral of the story is you should be able to handle all the expenses and your required savings tactfully.
Life is not easy, and if you are in your retirement days, then you are past the age of compromising wealth and experimenting with savings.
If you really feel that you can’t keep up to your kid’s expectations, then you must confess so without any hesitation.
Whatever the case is, whether or not you are capable, I would always suggest you have a talk with a financial coach, and see how efficiently you can help your kids without hurting your own savings.
