Talking to Adult Children about money: Balancing Fairness in Unequal Circumstances

Some children are better off than others due to circumstances, life choices or other reasons, but as a parent or a grandparent wanting to help manage family dynamics should try to remember that family dynamics can get tricky when one child is better off than another, but fairness doesn’t always mean equality

Recognize that each child has unique circumstances, strengths, and challenges. Avoid comparing them or making assumptions. Emphasize the values and principles that unite your family, such as hard work, responsibility, and generosity.

Encourage your child to reflect on their own financial decisions and goals. Tailor your support to each child’s circumstances. For instance, helping a struggling child with rent doesn’t require giving an equivalent amount to a more financially secure sibling. Example: "I know you're struggling with debt, but I'm proud of you for taking steps to address it. Let's work together to develop a plan to get you back on track. "

Help them identify areas for improvement and develop a plan to achieve their objectives. Put yourself in your child's shoes and try to understand their perspective. Explain your reasoning openly to avoid resentment. For example, “I helped your sibling because they needed it, but I hope you know that I value and support you equally.”

Acknowledge and celebrate your child's financial successes, no matter how small they may seem. This helps build confidence and motivation.

If direct financial support isn’t feasible or fair, offer help in other ways, such as providing childcare, sharing advice, or gifting heirlooms.

Involve the family in discussions about inheritance plans or other ways you intend to balance support. This avoids surprises and fosters mutual understanding.

By emphasizing fairness over strict equality and communicating openly, you can help preserve harmony while supporting your children in meaningful ways.

Discussing money with adult children is an opportunity to strengthen family bonds and instill lifelong financial habits. By fostering open communication, setting thoughtful boundaries, and addressing fairness with sensitivity, we can guide our children toward financial freedom while maintaining balance and harmony in the family. Remember to prioritize open communication, empathy, and understanding, and to focus on shared values and goals

The Bank of Mum and Dad can we support Without Straining Relationships

Financial support from parents can be a blessing, but it requires clear boundaries and mutual understanding. The first step is for you to establish what you're willing and able to provide and communicate these boundaries clearly. Clearly define the nature of the support upfront, do you want it to be a gift. a loan, or advance on inheritance. Putting it in writing can prevent misunderstandings. Avoid making promises you can't keep. Prioritize essential expenses, such as rent/mortgage, utilities, and food, over discretionary spending.

Offer what you can comfortably afford. Explain to your children why it’s important to maintain your financial independence, e.g., “I want to help you, but I also need to ensure I have enough for my retirement. “ If you’re unable to provide support, be honest but kind. Offer guidance instead, such as helping them create a budget or exploring other resources.

Tie financial support to a learning opportunity. For instance, helping with a down payment might come with a discussion about managing mortgage payments. Encourage your child to take ownership of their financial decisions and responsibilities. Offer guidance and support, but avoid doing things for them.

Consider a "gift" approach: Instead of loans or handouts, consider giving your child a "gift" of financial support. This can help them feel more independent and less indebted.

Review and adjust: Regularly review your financial support and adjust as needed. Be open to changing your approach if it's not working or if your child's circumstances change.

Example: "I'm happy to help you with your rent, but I want to make sure you're taking care of your other expenses. Can we review your budget together and see where we can adjust?"

By balancing generosity with practicality, you maintain trust while empowering your children to make sound financial decisions.

Starting the Conversation: Creating a Positive Dialogue Around Finances

 The holiday bills are starting to arrive and everyone is feeling the pinch. Many of us struggle to make ends meet, but we are always ready if we can to help our children or our grandchildren. Opening discussions about money can feel awkward, but setting the right tone makes a world of difference. To create a positive dialogue around finances, choose the right time and place: Choose a relaxed setting, like a family dinner or a one-on-one coffee chat, to make the conversation informal and supportive rather than pressured. Avoid discussing finances during stressful or emotional moments.

Begin by acknowledging your child's independence and expressing your pride in their accomplishments. This sets a positive tone for the conversation. Share your financial journey, including successes and mistakes, to break the taboo and model that finances are a topic worth discussing. For example, say, “When I was your age, I learned some hard lessons about budgeting. I’d love to share them with you, so you don’t have to make the same mistakes.” By using "I" statements: Instead of saying "you need to," say "I've noticed" or "I'm concerned about." This helps your child feel less defensive and more receptive to your concerns.

Discuss your shared values and goals, such as financial security, independence, or building a safety net. Frame conversations as collaborative rather than authoritative. Questions like, “What are your financial goals?” or “How do you feel about managing money?” invite dialogue. This helps your child understand your perspective and feel more connected to the conversation.

If asked, share your own financial experiences, successes, and challenges. Be open about your financial situation, and avoid hiding information or making assumptions. Encourage questions and feedback: Create a safe space for your child to ask questions and share their thoughts. Listen actively and respond thoughtfully to their concerns.

Example conversation starter: "Hey, I wanted to talk to you about our family's financial situation. I'm proud of the progress you've made, and I want to make sure we're on the same page. Can we discuss our goals and values around money?" By making the topic approachable and empathetic, you pave the way for ongoing, productive discussions about money.

New Years resolutions, is it too late?

The New Year, and the new Mayan cycle are with us and have been for a while. Life goes on and many of us who have sat down and made New Years resolutions are now reconsidering them or have already decided to not follow through on them. However, I would encourage you to consider following some of the following tips to help you become more conscious this year so that you can have the life you want.

1.Take time to plan. Invest time in working out a long term and short term financial plan. The worst thing one can do is start trying to accumulate wealth without a real idea of what they are going to do tomorrow.

2. Pay yourself first. One simple word, save. Before you pay rent, bills and the like, pay yourself that is why you work. Take it out of the money been before it gets passed around. Warren Buffet said something like you should save first and then spend what is left over. 

3. Invest wisely. Research stocks and know the amount of money you are willing to lose. High return equals high risk. Stay diversified and you should not be disappointed.

4. Use cash. Using cash not only gives you bargaining power, but it also brings spending to a more tactile experience. It is much easier to impulse buy with a card, but counting out the cash is a bit harder to do.

5. Do not depend on a credit card. Credit cards are not bad in and of  themselves, but if you are relying on a credit card to pay your rent or bills, then you have a serious problem. Get on your feet first.

6. Pay off debt. Get the monkey off of your back and pay off those outstanding credit card bills or your student loans. Your personal net worth will never increase until debt is g-o-n-e.

7. Pay cash for big ticket items. This makes you save and think about whether or not you really need that 80 inch plasma TV. It also gives you bargaining power at the check out stand. Try it, it works.

8. Shop around. Prices on big ticket items and even cars and comparable houses vary from street to street. Know what is the going rate in a given area for a given item.

9. Give to charities. Read any book about people who were able to amass a ton of wealth and they will say that they gave to charities on a consistent basis. Karma, anyone?

10. Budget. Take control of your money, do not let it control you. Budgeting allows you to tell your money where to go and what to do. It is the single most helpful practice to get into on one’s way to becoming wealthy

Getting ready to travel to Australia soon

As we prepare to leave for Australia near the end of the month to spend Xmas with my daughter and grandson,  I read this timely article on some things we should look our for as we travel. Enjoy!

Source

Here are a few of the most common money mistakes people encounter while traveling -- along with some fresh-from-the-road tips for how to avoid them in your own journeys.

Mistake No. 1: Not Preparing for Emergencies
When traveling, financial emergencies can range from theft to medical issues that require immediate attention (not to mention the frustration at not being able to find an open bank or ATM during a national holiday). When Davis lost her ATM card, she immediately got on the phone with her bank to minimize the impact of any fraudulent activity. Fortunately, she also had her husband's back-up card with her. For the rest of her trip, she was very selective about her use of ATMs.

How you can avoid it: "Always keep the number for the information line for your bank in a separate notebook, just in case," said Davis. "I'd also suggest checking with your bank before leaving home about what the policy would be to get a new card to you if there's a problem."
[InvestingAnswers Feature: Why Travel Insurance Might Be Worth Packing

Mistake No. 2: You Don't Have Enough Cash on Hand
Though you may go for several days (or even weeks) back home without dipping into your wallet for cash, don't rely too much on plastic while traveling. You never know when your card will be declined -- either due to a flagged charge from your bank or because a merchant doesn't accept your credit card. (Discover is not commonly accepted abroad, for example.) 
How you can avoid it: Davis' recommendation: "Always take at least a few notes in the local currency with you when switching countries. You never know when a bank machine you'd been counting on will be out of service and there's nothing more frustrating than being unable to do anything because you don't have the right kind of funds."

Mistake No. 3: Not Notifying Your Credit Card Company of Your Plans
It recently happened to me -- I neglected to call my credit card company before a transatlantic cruise to Spain. A charge to one of my credit cards was flagged in the Caribbean at the first port of call, and the card was rendered useless until we reached a mainland port where I could access a phone.

How you can avoid it: It just takes a few minutes to get on the phone with your company to give them a head's up. Most companies make the process pretty painless, and it will save you a lot of hassle in the long run. 

Mistake No. 4: Getting Ripped Off on Exchange Rates
Novice travelers frequently fall prey to this mistake, because converting money to local currencies sometimes puts you at the mercy of others, who might see an opportunity to make an extra buck off your dollars. 

How you can avoid it: The best thing to do is minimize the number of exchanges you do, because each time you change currency, that transaction will have fees associated with it. Experts say debit cards and credit cards typically have the best exchange rates, though many carry foreign transaction fees -- find out before you travel in order to get the best deal. The worst exchange rate you'll find are those that seem "easiest" for tourists, such as exchanging money at hotels, according to the New York Times.

Mistake No. 5: Missing Opportunities to Save on Gas, Airfare, Etc.
I get it -- traveling is for relaxing and not stressing out so much about saving a few bucks here and there. But with a little advanced preparation, you can enjoy your trip while minimizing the financial impact.

How you can avoid it: Here are some tips from Andrew Schrage of Money Crashers: Download a smartphone app to help you find the best places to fuel up on the road; book a hotel room with cooking facilities to cut down on your dining out bill ("You significantly increase the overall cost of your vacation by eating out three times a day," he warns) and use a daily deal website to whittle up to 50% off your entertainment on major tourist attractions. 

The Investing Answer: Put as much effort into preparing your finances for your trip as you do packing your bags. As much as possible, think through the scenarios you are likely to encounter while traveling. Call your credit card companies and banks to alert them of your plans and find about any fees you might be assessed before they show up on your statement after your trip.

Household spending

According to Statistics Canada Survey of Household Spending in 2009 average household spending in Canada declined by 0.3% to $71,120, following the economic slowdown that began in the fall of 2008, personal taxes accounted for 20% of the average household’s budget in 2009, while food, shelter and clothing represented 34%, and transportation 14%.

The chart below represents how the average Canadian spends their money. I see savings for pension combined with personal insurance payments, but the percentage of each is not clear. Savings are difficult when all of your money is committed to spending to live.

No wonder OAS is important to the well being of older Canadians and will continue to be an important part of the planning people use when thinking about how they will live when they retire.