How Overindulgent Parents Harm Their Children’s Finances

My son is growing up to be too arrogant, he wondered. The 21-year-old wanted to study abroad and expected his parents to pay his tuition, find him an apartment and give him pocket money. This was after arguing that he would not take competitive exams but would instead get into a private university in a country of his choice. Let’s focus this week on the overindulgent parents and their overindulgent children. These parents repeatedly tell their children that their lives are dedicated to them. Many are prepared to do whatever it takes to provide what they believe is best for their children. This indulgence starts with birthday parties and treats, moves on to coaching classes and courses of their choice, and extends to preparing and subsidizing them for their adult lives. The less said about lavish weddings, the better.

Financial planners indicate that most parents’ primary financial goal is to educate their children. They save aggressively to make it happen. They work far beyond the means to provide for their children. A combination of factors is at play: Parents want their dreams to be realized by their children; they relive their lives through their children; they compete in social circles for their children’s achievements; they believe that indulging their every whim is a mark of good parenting; they suffer from the guilt of being away at work and try to compensate for it, opening the door to manipulation. The list of parents’ faults is quite long.

I would venture another explanation. We have a culture of parental martyrdom. A good father is marked by his ability to sacrifice himself so that his children are better off. We have emerged as a society that stretches this idea too far, where the competition for martyrdom and its glory masks everything else. We do not see fathers having conversations about their other goals, aspirations, and responsibilities to their children.

Children grow up unaware of the other demands on their parents’ income and wealth. They don’t know that their parents may want to pay for the education of some less privileged cousins ​​as well. They may not think much about their parents taking out loans, incurring high-cost credit card debt, or giving up their own goals for career or leisure. In today’s nuclear families, many children are quite indifferent to their parents going into debt or compromising their comfort after retirement.

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If you’re picturing a cruel, heartless child at the center of all this, you’ve only got part of the story. The untold part is where the parents didn’t discuss other needs and willingly gave up their share of the wealth to finance their children. I can only watch with disdain and alarm as families shop for weddings. The parents simply give in to the children’s high demands without registering a protest. Even though it’s their money and they have the authority to decide how it should be spent, they have no control over the choices.

Do we live in prosperous times where everyone earns and spends well? Do parents have money and willingly allocate it to indulge their children? If we peel back the layers of exhibitionism, guilt, emotional blackmail and blind love, what explanation would we have for parents spending all or most of their wealth on their children? The answer must lie elsewhere.

If we look at history, there have been two broad orientations to wealth. One is the forgiveness of irrational opulence. In monarchies, the commoners’ understanding was that some were entitled to wealth and its irrational spending, and others should not judge them for such vulgarity. The second is the acceptance of strenuous sacrifice and poverty. During times of deprivation, we sacrificed willingly and considered it a virtue. Then we extended it to cover the good times and the bad. I choose these two, among many other orientations, to make a point.

When this society was relatively poor, parents who allocated considerable incomes to their children’s education expected that they would receive care in old age as a reward. This quid pro quo was essential in those days. What happens when society begins to become rich, moving out of poverty and enjoying purchasing power at various income levels? It emerges with a combination of indulgence for some (children) and sacrifice for others (parents). It seems right and acceptable. Look around you and you will count the parents who call their children prince, princess, king or queen.

Children believe they are more equal than others in the household and are allowed to take this privileged position without question. Parents do not see it as a lack of self-esteem or esteem when they are denied the right to make choices about their own money. Our money is a slave to our sense of who is master and who is servant. We badly need to democratize this process.

Importantly, there is a vacuum in terms of what else money can do; look at our abysmally poor level of community service and charity. We don’t see our money as having the power to change the lives of those around us, beyond our immediate family. We ask the super-rich to allocate money to charity, but we lack the social responsibility at every level to take our immediate community with us. We still love freebies and don’t like paying for things, which makes it harder for us to give.

A healthy approach to money requires that those who earn it not only feel guilt-free about their allocation, but also be able to question their wasteful distribution and reclaim the power to allocate it fairly. Parents are labeled selfish when they exercise this authority, and in these days of overly sensitive young minds, they are mortally scared to refuse a demand. We need more conversations about the equitable, fair and just allocation of money. Even if children believe that their parents’ money is theirs to spend as they wish.

The author is president of the CENTER FOR EDUCATION AND LEARNING IN INVESTMENTS

(Disclaimer: The opinions expressed in this column are those of the writer. The facts and opinions expressed herein do not reflect the views of www.economictimes.com.)

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