HANDLING YOUNG SON AND DAUGHTER AT TEENS , DIFFICULT PART FOR PARENTS

A friend of mine pays for her married daughter’s health insurance, since she lives in the expensive San Francisco Bay area. One of my clients lets her kids have full use of one of her cars while she pays the insurance and maintenance. Sometimes these acts of love for adult children can cause more harm than good.

Of course, your son or daughter needs medical insurance, and a family needs a vehicle to get around. But those expenses

 are “basics” — regular everyday needs. Covering the basics can imply, “You can’t stand on your own two feet.”

Instead of helping with everyday expenses, allow your children to cover their own food, clothing, shelter, transportation, and medical costs. Then, if you’d like to do something over and above, go for it.

For example, say you live in a snowy climate like I do in Park City, Utah. A set of snow tires in the winter is really nice to have! A lovely gift to a young family could be a set of snow tires and the cost to switch them out the first year.

If you want to offer gifts over and above the basics, the implied message is more like, “You’ve got this, but because I want to and can afford it, I’d love to provide a few extras!”

Plan vacations to experience together.

Some of my greatest memories are of family vacations with my grandparents, parents and my kids when they were little. My grandfather used to foot the bill for a house or condo rental at a vacation destination. It was wonderful to spend quality time together, and I still enjoy looking through the photos today.

Isn’t enjoying quality time with family one of life’s greatest pleasures? The question is: Should you foot the bill for a vacation for everyone to make that happen? Sure! Spending time together helps build and maintain family bonds.

You can do that without spoiling everyone, too. Set boundaries — decide what you can afford and want to pay for, and let your kids know. They can choose to save up and pay the difference.  

For example, you could pay for the housing (like my grandfather did) and transportation to get there (if airline tickets are involved). The kids can split the food costs and entrance fees to activities as well as souvenirs, etc.

You just want to ensure that your kids have skin in the game, as well.

Put a damper on the talk of an inheritance.

Even the super rich are not doing it, from Warren Buffett to eBay founder Pierre Omidyar to rock star Gene Simmons. Many of these tycoons feel that expecting an inheritance in the future could be a disincentive for children to work and contribute to society in the present.

First of all, the inheritance might not actually materialize — you might need your funds or change your mind and want to spend them. You don’t want your kids counting on that money as part of their own retirement plans.

Additionally, expecting and counting on a lump sum in the future can change a person’s perspective. A key principle in behavioral finance is called “mental accounting.” People designate money in different accounts for different purposes — such as a savings account that’s used for emergencies and a retirement account that is not to be touched until you turn 59½.