Question: Hi, Randell. My child has been working for five years already but I feel that I can do more to help him become financially independent. I’ve been helping him out by giving him a monthly allowance of P10,000, instead of him contributing to our expenses in the house. He was recently unemployed and lives in our house in Manila. I do not want him to have a hard time like I did when I was the same age, but I think he can put more effort into building his savings and becoming financially independent. I just don’t know where to start. It’s so common for us parents to worry about our children even when they’re already grown up. I hope you can help me with this.—Jose, 54 years old from Mindoro
Answer: Hi, Jose. I completely understand what you feel. We Filipinos have close family bonds and this kind of relationship also entails financial bonds unlike other countries where people are considered independent upon reaching 18 years old.
However, there is a fine line between helping your child and tolerating bad financial habits. Remember that doing this to your child today can get him the financial habits he needs for a better future. What will happen if you’re not there to support him? He might panic and get into a dangerous debt cycle because he fears to live below his means.
What you can do is have a talk with your child about the situation. Have an open conversation about the matter and he can voice out the reason why he thinks he is not self-sustaining yet even after working for a long time. I have seen that open and honest communication helps in situations like this; but you need to be firm. You can also clarify the instances where you can help him and when you will let him figure out things on his own. This way, he will become more discerning and not think of you as a financial cushion even for avoidable shortcomings. This will be a tough conversation but a necessary one. I know it’s not easy to resolve financial matters in the household but with the proper approach, this can do wonders for members of the family.
Another way is to still give the P10,000 allowance but make your child work for it. Have him work part-time in your family business or designate specific tasks for him like running errands for you in Manila if you need any help. It should be clear that he is not doing a favor for you so he needs to finish the tasks you assign to him. Your child is an adult now, you no longer have any financial obligation to him. It’s about time he learns that there is no such thing as a free lunch, so to speak. Also, be the example that he will want to look up to. You can’t preach that your child has to have a budget and be debt-free if you are not practicing this yourself. Your actions can serve as an inspiration to him to improve his financial status. Sometimes it’s necessary to impose tough love on our children so that they can value hard work and recognize the rewards of financial independence. We love our children but there are times we need to show tough love; this is the time to do so.
Remember, when we do help, let’s make sure we actually help and not encourage bad behavior, otherwise we do more harm than help.
(Randell Tiongson, RFP is an advocate of Life & Personal Finance. With nearly 30 years of experience in the Financial Service Industry – Banking, Mutual Funds, Insurance and Financial Planning, and Management Consultancy – he has become one of today’s most respected personal finance coaches in the country. Check out his website for more financial advice www.randelltiongson.com)