I wanted to finish up this week with what I felt was the biggest danger with financial independence. From my perspective, the biggest challenge that people on the cusp of financial independence face is the danger of a damaged relationship. Parents are afraid to let go, or push their children away roughly in an effort to get them to fly. Children can pull away too strongly or build up a relationship of adult financial dependence that is unhealthy for both parents and children.
The truth is that the nature of the parent-adult child relationship is changing from a parent-young child dynamic into a relationship of individuals with much more equality, and that shift is difficult, even for people who have known and loved each other from the earliest days. Financial relationships are just a part of this changing dynamic, but given the emotional challenges of money, many parents and many children end up quite hung up over the financial aspects of this transformation.
Here are some tips for how to handle this transition without damaging a lifelong relationship.
Communicate until you can’t communicate any more. As difficult as it can be, communication is the absolute key to surviving a transition like this. If something is bothering you, talk about it. If you don’t know what’s going on and want to be on the same page, make a phone call or stop by for a visit. The best part is that this transition can quite often strengthen the relationship.
Be very clear on expectations. If your child is at college and you’re thinking that you’re going to cut off their financial support before their junior year, let them know and tell them why as soon as you can. If you put it off until later, one of two things will happen, and both are bad. You will either give up on your decision to cut off support (letting yourself down and keeping your child from being independent for even longer), or else you’re going to drop a major, sudden bomb on your child, which is almost a guarantee that your relationship will be damaged.
The reverse is true if you’re the one becoming independent. If you are unclear as to where exactly the financial relationship between you and your parents is at, they’re probably as conflicted as you are. Take the first step and give them a call so that you are all on the same page on this. If you don’t, you’re bound to wake up one day with a sudden and major change in your financial status, something that no one wants.
If your child is still at home, sit down and talk about expectations. When do you want to cut financial dependence? How long do you expect to be financially dependent? If the answers to these questions are very far apart and it hasn’t been communicated, you’re asking for trouble.
Don’t know how to talk about this? Here are five “ice breaking” questions that can help get the ball rolling.
1. Where do you want to be in one year? In ten years?
2. What will those goals require in terms of support from the other?
3. What do you want our relationship to be like in one year? In ten years?
4. What are your dreams for the remainder of your life? What needs to happen in the short term to make those dreams happen?
5. What does independence really mean, good and bad?
Don’t just do it once and forget it; maintain the conversation. If you just talk about these issues once, it will help, but the dynamic of your relationship will continue to change for a while until you find a steady state you’re both comfortable with. Don’t let the issues become old and stale; hit upon your goals, perspectives, and feelings on a regular basis.