In the mid-1980s, the children who passed out of top institutes got astronomical salaries compared to their parents. I heard one aunt tell her daughter ‘your father got this salary only when he was 38..you have got it at 24’ – when she got her MBA placement.
Cut to 2024, many of the parents have done extremely well and find that their children are not able to swing it big on their own. So right from getting them seats in ‘good’ colleges (where you can buy seats instead of qualifying for them), to spending lakhs in cricket coaching, parents will do anything to pitch (and swing) for their kids.
Some kids feel like a failure if they can’t maintain their parents’ lifestyle standards (parent is 54 and kid is 24!!) right at the beginning of their careers. Parents are willing to subsidise everything –housing, vacations, entertainment, -like a crutch!
I see parents supporting their kids endlessly in terms of money and effort (especially child-care) and I also see the case where parents are very demanding when they stay with their kids. Parents expect the kids to look after them, take them around –to the doctor, to many miscellaneous social functions, etc. When you are 72, remember your 44 years old son (daughter) has a demanding job, kids, and an active social life too! I know one parent who spends a lot of his son’s money –and it became embarrassing when he had to limit their expenses with harsh words.
Most of the financial issues between parents and children happen simply because of poor communication at home. We are unwilling to talk about money at home.
We need such dialogues…
‘You will study in a college where you get admission on your own merit, not in a college where I can buy you a seat’
‘Dad, when I said my CTC is R12 lakh it does not mean I get R1 lakh a month in my bank account’
Sounds simple? Most people can’t (won’t) tell their families how much money they earn, spend, save and/or invest. This means the people dependent on you don’t know what they should be doing with the money. If your spouse, parents and kids get mixed signals, they will ASSUME. That is the worst thing that can happen. One kid who was taken for a vacation to Disneyland in his class 9 does not understand why his parents can’t afford his Ivy League education costing about US $300k. Truth is his parents can’t afford it.
When the children are growing up, tell them that they are welcome back to the parental home at any time if they need to come back. However, put a price to it – subsidised rent, food, (not zero), and that the kids have to chip in with tasks and errands. Your 33-year-old son and 32-year-old daughter-in-law don’t need to get everything free, do they? – this is a real-life case where the son lost his job and his four-month pregnant wife was advised bed rest.
What would have you done as a parent? I have no clue what I would have done.
PV Subramanyam
Writes at www.subramoney.com and has authored the best seller ‘Retire Rich - Invest C40 a day’