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Managing Your Money

Do parents get a say on finances?

By Michelle Singletary
November 5, 2009

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I’ll be the first to admit, I’m a hovering parent, especially when it comes to the money my children get and spend.

Of course, my offspring are still young. My oldest is 14. But I am constantly giving her advice about the right way to handle her money. Once after a lengthy discussion, I said: “It’s my full-time job to make sure you are a good steward of your money.’’

She replied: “Can you make it your part-time job?’’

I thought about this exchange after receiving a rather long note during a recent online discussion. The chat participant wondered at what point should parents back out of the financial business of their children.

It’s a good question, and one that I’m sure is coming up more often in an economy where young adults are moving back home to lick their financial wounds received from a lost job, divorce, credit card debts, or student loans.

When does concern over your adult child’s money woes cross the line into oppressive hovering?

Let’s look at the situation from the woman who wrote to me.

“My parents and I are at an impasse,’’ she said. “After graduating college, I had minor credit card debt. I asked to move into my parents’ home after living on my own for a while to get rid of the debt, and to get other finances in order. I wanted to do a reset and start off right before it got out of hand.’’

But going back home didn’t immediately solve the woman’s underlying problem.

“My debt got bigger,’’ she wrote. “My parents found out about my debt and have been yelling at me about it. The problem is my parents are still ordering me around about my money. I do not ask for parental loans at all. I have a rainy-day fund. I’m finally doing everything right and they are still yelling at me.’’

I’m sorry to tell her, but the moment she moved back home, she opened that door to her financial life. In many respects, her parents do have a right to know, especially if she isn’t paying rent or buying food or helping with utilities.

The woman said her parents didn’t know how much she had in savings and checking accounts. They didn’t know her current debt amount. They didn’t know she finally changed and stopped using credit and is now paying only with cash.

“At this point I can’t even buy a cheeseburger without being yelled at,’’ she said. “I’m starting to resent any money conversations.’’

It’s not appropriate or usually effective to yell at a grown person. But maybe her parents are yelling because they feel guilty they didn’t teach her how to manage her money. Perhaps it’s because they care or are worried she may never get back out on her own. Maybe they are frustrated because they haven’t seen any progress.

How would they know if she had changed if she doesn’t show them the proof?

So she should tell them exactly what she has been doing to straighten things out.

Pull out the bank statements since moving back home and let the parents see that she is balancing her checkbook. Show them that she is no longer relying on debt to live beyond her means. Let them see that she is building up an emergency fund, even while paying down your debts.

Let them have a look at her budget, which she most certainly should have.

Show them her debt payoff plan. And, update them every time she makes a significant dent in that debt.

She should be transparent, because by sharing the information with her parents, she may win back their respect and hopefully put a stop to the yelling.

Should this be their business?

Yes, I think the financial well-being of your children should always be your business. I know I’ll be advising my children about financial issues even when it moves from my full-time to part-time job.

Michelle Singletary writes The Color of Money for The Washington Post.

Managing your money
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